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The Nigerian government has acknowledged that fuel subsidy expenditures are expected to surge to ₦5.4 trillion in 2024, according to a recent revelation by the Minister of Finance, Wale Edun.
This disclosure was made during the presentation of the Accelerated Stabilisation and Advancement Plan (ASAP) report, which outlines strategies to address critical challenges and stimulate growth across various sectors.
The projected subsidy cost for 2024 marks a significant increase from ₦3.6 trillion in 2023 and ₦2.0 trillion in 2022, highlighting a continuous upward trend in government spending on fuel subsidies.
This revelation comes amidst previous denials from the government regarding the complete deregulation of fuel prices.
The Minister of State for Petroleum Resources, Heineken Lokpobiri, reiterated during a ministerial briefing on the anniversary of President Bola Tinubu’s administration that fuel subsidies had been entirely eliminated.
“I can confirm to you that subsidy is gone; officially, there is no subsidy; I want to make it clear that there is no subsidy in the country today,” Lokpobiri stated.
These statements come after significant policy shifts last year when President Tinubu declared the end of the fuel subsidy, leading to a hike in pump prices from ₦250 per litre to over ₦500. Prices have continued to climb, reaching an average of ₦702 per litre as of April 2024.
The persistence of fuel subsidies and the floating of the Naira have had a profound impact on the economy, contributing to soaring inflation rates. As of April 2024, Nigeria’s headline and food inflation rates had escalated to 33.69 percent and 40.53 percent, respectively.