Shøck, mixed reactions as IMF EXPOSES return of petrol subsidy under Tinubu administration

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Shock and mixed reactions have trailed the confirmation by the International Monetary Fund (IMF) that the federal government has resumed the payment of subsidies on the premium motor spirit (PMS), otherwise known as petrol through the backdoor.

Recall that during his inauguration on May 29, 2023, President Bola Tinubu announced an end to petrol subsidy, triggering a hike in the prices of goods and services in the country, reports Daily Trust.

A few weeks later, the Central Bank of Nigeria (CBN) collapsed the different exchange rate regimes into one, with the value of the naira to the dollar weakening. As of Monday, dollar was N1,499/$1 at the official window and N1,515/$1 at the parallel market.

Earlier in the week, the IMF issued a statement on the conclusion of its Executive Board’s Post Financing Assessment with Nigeria, and it expressed concerns that the government had capped the prices of fuel at retail stations.

The global lender advised the administration of President Tinubu to completely stop the payment of subsidies on petrol to free funds to run the government.

After the removal of petrol subsidy in May 2023, the pump price changed from N185 per litre to N400 per litre, and then to N568 per litre at NNPC fueling stations, while some sold above N600.

There were reports that the landing cost of petrol had gone up and the retail price could go up to N1000 per litre.

Investigation had revealed that the federal government paid N169.4 billion as subsidy to keep the pump price at N620 per litre.

A document from the Federal Account Allocation Committee (FAAC), sighted by one of our reporters, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220 million (N169.4 billion at N770/$) out of the $275 million to pay for the PMS subsidy. Then NNPC held back $55 million, illegally.

The IMF, in its latest statement, said the Tinubu-led administration has “capped retail fuel and electricity prices” ostensibly to “ease the impact of rapidly rising inflation on living conditions, thus partially reversing the fuel subsidy removal.”

Many Nigerians on X have reacted differently to the statement made by the IMF.

@iam_realjayson said: “I would really like to know the mathematics behind this… Fx is on a free fall, while PMS pump price is relatively stable. Miracle really no dey tire Jesus.”

@journalofOCO: “Once again, as long as the people in power are dishonest, this fuel subsidy issue will continue to be a bone in our throat. For those who say the President doesn’t matter, know that the continued support of dishonest people will lead to the continued destruction of the country.”

@ourt_destiny: “It’s why fuel hasn’t spiked to 1k per liter while everything else has spiked up in price.”

@Manseey: “Lol. So the removal was a scam in the first place. Tell me something I don’t know about Nigeria.”

@Andrew_Eneyi: “The inconsistencies and lies under this government is so shameful. So subsidy is actually not gone and we are suffering like this in Nigeria.”

@TimiTheAce: “I have a conspiracy theory that these guys are still subsidizing this fuel price because they know if they sell it at the actual price or anything greater than the current price, they’d be an outrage and the whole of Nigeria would fight back. They’ve not even increased it sef…”

@Jay_M85: “Nothing surprises me about Nigeria anymore. Inside one surprise another bigger surprise Dey inside.”

@MoraOgo: “Don’t mind IMF, Nigerians can’t afford to buy fuel for 1’500 per litre.”

@tangledthug: “There is no country in the world that does not subsidize when item or the other I don’t understand IMF stand than Nigeria must remove all form of subsidy, this is not fair.”

@Pauly2570: “As long as they keep listening to those international money lenders coupled with the profligacy, the country will continue to deep into economic crisis.”

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