Tinubu’s plan to remove the measure triggers a stock run

Nigeria's President-elect Asiwaju Bola Ahmed Tinubu (center) salutes during the inauguration ceremony at Eagle Square in Abuja, Nigeria, May 29, 2023

New President Bola Tinubu announced a plan to end the fuel subsidy after being sworn in on Monday

Nigeria’s new president’s first full day in office saw people panic buying fuel after news broke of the removal of a decades-long subsidy on petroleum products.

In his inaugural speech on Monday, Bola Tinubu said the grant had “disappeared”.

But he gave no timetable or further details on this major political decision.

On Tuesday, his team clarified that he meant the end of June and that panic buying is “unnecessary” because the policy will not take effect immediately.

President Tinubu wants to ease the pressure on public finances, but the end of the subsidy will increase the price of gasoline and will also impact other prices at a time when inflation is already high.

In response to his comments on Monday, many gas stations raised gas prices while others stopped selling altogether.

Nigeria’s state-owned oil company, the sole importer of petroleum products, assured the public that it had sufficient supplies.

But that hasn’t stopped panic buying, with most fearing a drastic rise in the price of petrol which is expected to be sold at the regulated price of 185 naira a liter (£0.32, $0.40).

Some people have uploaded videos of gas stations already raising prices, in some cases by more than 200%.

Some private bus drivers, who many Nigerians rely on to get around, have also been unable to refuel their vehicles.

This has left people stranded at major bus stops in the capital, Abuja, and the country’s largest city, Lagos.

Despite its oil wealth, Nigeria is unable to refine enough crude to meet local demand. It therefore imports petroleum products, which are then sold at a price set by the government.

But the subsidy is a huge drain on public finances. Last year, it gobbled up 4.3 billion naira ($9.3 billion; £7.5 billion) and for the first half of this year, 3.36 billion naira has been budgeted to it.

On Monday, Mr Tinubu said this could no longer be justified and the funds would instead be spent on public infrastructure and improving people’s lives.

But the grant has long been seen by many Nigerians as one of the few benefits they receive from the state.

The last suppression attempt in 2012 led to nationwide protests, and then President Goodluck Jonathan had to make a policy U-turn.

So far, a powerful association of petroleum product sellers has said it does not support President Tinubu’s plan. He said the new government should start a dialogue before making the decision.

The spokesperson for the Independent Petroleum Marketers Association of Nigeria, Ukadike Chinedu, is quoted by the Nigerian newspaper Punch as saying the move would cause “runaway inflation and inflict more hardship on the masses”.

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