President Bola Ahmed Tinubu has defended his administration’s decision to remove the longstanding fuel subsidy, stating that the move was necessary to prevent Nigeria from plunging into economic collapse. Speaking at an economic summit in Abuja, the President asserted that the country was at risk of bankruptcy due to the enormous financial burden of the subsidy, which had been draining national resources for decades.
According to Tinubu, the Nigerian government was spending nearly $10 billion annually to subsidize fuel prices, a policy he described as unsustainable given the country’s dwindling revenue and rising debt obligations. He explained that continuing with the subsidy would have left the government with insufficient funds for critical sectors such as education, healthcare, and infrastructure.
“When we took office, we faced a difficult decision: either to continue funding a subsidy that mostly benefited the wealthy and smugglers or to redirect those funds towards the development of our nation. We chose the latter, knowing that while it would be painful initially, it was the right thing to do,” Tinubu stated.
The removal of the subsidy, which was implemented immediately after Tinubu’s inauguration in May 2023, led to a significant increase in fuel prices nationwide. Petrol prices tripled almost overnight, causing a surge in transportation costs and inflation across various sectors. The policy triggered widespread protests, with labor unions and civil society groups demanding measures to cushion the economic impact on ordinary Nigerians.
In response to the public outcry, the government introduced palliative measures, including cash transfers to vulnerable households and plans to improve the country’s public transportation system. Tinubu assured Nigerians that his administration is working to stabilize the economy and that the benefits of the subsidy removal will become evident in the long run.
International financial institutions, including the World Bank and the International Monetary Fund (IMF), have praised the decision, noting that it aligns with global economic best practices. However, opposition politicians and some economic analysts remain skeptical, arguing that the government needs to do more to address the immediate hardships caused by the policy.
Despite the controversy, Tinubu remains firm in his stance, stating that his administration is focused on long-term economic reforms that will position Nigeria for sustainable growth.