Nigeria’s average daily petrol consumption has fallen by 28 percent since President Bola Tinubu scrapped a popular but costly subsidy on the fuel at the end of May, data from the industry regulator has shown.
Average daily petrol consumption fell to 48.43 million litres (13 million gallons) in June, down from the previous average of 66.9 million, according to figures released to the Reuters news agency by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
A subsidy had kept prices cheap for decades in Africa’s biggest economy, but it became increasingly expensive for the country – the government spent $10bn last year – leading to wider deficits and driving up government debt.
Subsidy became a national buzzword in January 2012 when then-President Goodluck Jonathan announced the subsidy removal. Fuel prices increased from 65 nairas ($0.14) to 140 nairas ($0.3) per litre and triggered almost two weeks of protests known as #OccupyNigeria, causing Jonathan to reverse the decision.
Since the subsidy was ended, a black market in neighbouring Cameroon, Benin and Togo – that relied on petrol smuggled from Nigeria – has collapsed.
Petrol prices have nearly tripled in Nigeria, angering unions and causing a spike in transport costs, a move that even Tinubu had predicted. It has also hit small businesses and millions of households who rely on petrol generators for power due to intermittent grid supply.
“I admit that the decision will impose [an] extra burden on the masses of our people. I feel your pain,” the president had said in a broadcast to mark Democracy Day – June 12.
Nigerians, the president said, should bear the decision to “save our country from going under”.
Despite having spent $2.41bn on the subsidy in the first five months, Nigeria could save up to $5.1bn this year from scrapping the petrol subsidy and from foreign exchange (FX) reforms, the World Bank said on June 27.
