Just Two Days After Being Appointed, The President Of Nigeria Raised The Price Of Fuel 3 Times

Presiden Nigeria, Bola Ahmed Tinubu di Abuja, Nigeria, 29 Mei 2023. REUTERS/Temilade Adelaja

The Nigerian National Petroleum Corporation (NNPC) on Wednesday, May 31, 2023, raised the price of gasoline to 557 naira per liter from 189 naira – roughly from IDR 6,000 to IDR 18,000.

This policy was implemented a few days after the newly inaugurated President, Bola Tinubu, announced the removal of fuel subsidies.

The increase marks the end of the fuel subsidy regime that NNPC claims costs $867 million or around IDR 13 trillion per month.

The people of Nigeria should prepare for higher transportation costs, while businesses that rely on gasoline generators due to limited power supply will face higher expenses.

NNPC stated in a statement that the gasoline prices are being adjusted "in line with the current market reality."

"It is important to note that prices will continue to fluctuate to reflect market dynamics," NNPC said.

Facing economic difficulties, many Nigerians consider cheap gasoline as a right, and the last time the government attempted to remove fuel subsidies was in 2012, which resulted in nationwide protests.

Tinubu, who was the opposition leader at the time, opposed the removal of subsidies. He was sworn in as the country's leader on Monday, May 29, 2023.

Tinubu's inauguration took place despite calls to annul the results of the elections held in February this year.

In his first speech, Tinubu called for the preservation and development of democracy in Nigeria. He also referred to democratic governance as the key driver of reforms that will ultimately unlock the nation's potential.

Ahead of the anticipated end of the subsidies that have kept prices low, Reuters reported that drivers rushed to fill their tanks.

NNPC fuel outlets sold gasoline at 448 naira per liter in some parts of Lagos, up from 185 naira, while in Abuja, it was sold at 537 naira.

On Tuesday, the CEO of NNPC stated that the company owes $6.1 billion or IDR 91 trillion in fuel subsidy payments by the federal government. According to him, Nigeria can no longer afford to pay these subsidies.

Credit rating agency Moody's stated that Tinubu's commitment to remove subsidies and unify Nigeria's various exchange rates is a "positive credit." However, it warned of risks in the initial period, including higher inflation, weaker economic activity, and increased social dissatisfaction.