President Bola Tinubu’s administration has announced that fuel subsidies are projected to soar to N5.4 trillion in 2024, a significant increase from the N3.6 trillion budgeted for 2023. This information was disclosed in a draft report of the Accelerated Stabilization and Advancement Plan (ASAP) presented to President Tinubu by the Minister of Finance, Wale Edun, on Tuesday.
“At current rates, expenditure on fuel subsidy is projected to reach N5.4 trillion by the end of 2024. This compares unfavorably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” stated the draft copy of the ASAP.
This unexpected development comes after months of government denials regarding the continuation of fuel subsidies. The federal government had previously asserted that it would cease subsidizing fuel costs, opting instead for a deregulation policy.
“As far as I’m concerned, the President removed the subsidy and it remains removed till today. Anybody who is saying that subsidy is being paid, it is left for the person to bring the facts and then we will talk about them,” Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), categorically stated in April.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, explained that the process of removing the fuel subsidy is ongoing and dependent on multiple factors. He emphasized the government’s shift towards using Compressed Natural Gas (CNG) to meet the country’s energy needs.
“Clearly, it is a combination of pivoting away from petroleum imports. Now, we are focusing more on CNG,” Edun remarked. “It is an ongoing conversation, it is an ongoing process of ensuring that fuel subsidy is eliminated from the Nigerian economy. That is what Mr. President’s intent is and that is what is being worked towards.”
The projected increase in fuel subsidy expenditure highlights the complexities and challenges faced by the Tinubu administration in its efforts to stabilize and advance the Nigerian economy. The government’s strategy and its implications for the national budget will be closely watched by stakeholders and the general public in the coming months.
