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| Taiwo Oyedele |
The Nigeria government has firmly ruled out any return to fuel subsidy, with the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, insisting that the policy will not be reversed despite growing public concerns over rising living costs.
‘Subsidy Creates Economic Distortions’ - Oyedele
Speaking in Paris during a meeting with global investors alongside President Bola Ahmed Tinubu, Oyedele maintained that reinstating the subsidy would harm the economy.
“We will not bring back fuel subsidy because it creates distortions for the economy,” he said, adding that the government would also not impose price controls, as it believes in a market-driven system.
He stressed that fuel pricing would be left to market forces, with regulatory oversight to prevent exploitation.
Rising Inflation After Subsidy Removal
Nigeria removed petrol subsidy in May 2023, a move that has since triggered sharp increases in fuel prices and broader inflation.
Official figures show:
- Inflation rose from 22.41% in May 2023 to 34.19% by June 2024
- Food inflation climbed above 39% by October 2024
- Transport costs surged by nearly 300%, worsening the cost-of-living crisis
These developments have intensified calls from Nigerians for government intervention.
Tinubu Defends Reform Gains
President Tinubu told investors that removing the subsidy which he described as a “burden” has helped stabilise Nigeria’s foreign exchange market.
“Subsidy that was a burden… was removed and ever since we have achieved FX stability,” the president said.
The administration says its broader reform agenda is aimed at improving fiscal discipline, enhancing transparency, and laying the foundation for long-term economic growth.
Balancing Reform and Public Pressure
While the government remains committed to its market-based approach, analysts note that the challenge now lies in translating reforms into tangible relief for ordinary Nigerians.
The continued rise in fuel, food, and transport costs has placed significant pressure on households, raising questions about how quickly the benefits of these policies will be felt.
Outlook
Despite mounting pressure, the Federal Government’s position appears unchanged: fuel subsidy will not return.
Instead, authorities say the focus will remain on:
- Strengthening economic reforms
- Attracting investment
- Managing inflation
- Ensuring long-term fiscal stability
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