According to official confirmation from the Nigerian government, N5.4 trillion would be allotted for oil subsidies in 2024—a substantial increase over prior years. This declaration counters previous assertions made by several government representatives who had adamantly denied the existence of any subsidies and insisted that the country had switched to a policy of gasoline price deregulation.
Wale Edun, the Coordinating Minister of the Economy and Minister of Finance, made the announcement during a presentation. Edun was speaking about the Accelerated Stabilization and Advancement Plan (ASAP), a strategic program designed to address important issues in the context of economic reform and stimulate growth in a number of different industries.
Edun emphasized in his talk the rising expenses related to fuel subsidies. He went on to say that N5.4 trillion is expected to be spent on subsidies by 2024. This amount shows a sharp and ongoing increase in subsidy costs, as did the N3.6 trillion recorded in 2023 and the N2.0 trillion in 2022. These numbers were exposed in the draft form of the ASAP that Edun displayed, which also showed a pattern of rising financial support for gasoline subsidies over time.
Heineken Lokpobiri, the Minister of State for Petroleum Resources, and other government officials have been adamantly refusing to acknowledge anything for months prior to this statement. Even as recently as April, Lokpobiri claimed that the President had eliminated fuel subsidies and that any other assertions required proof. “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,” Lokpobiri stated, reflecting the government’s previous stance on the matter.
The government’s shift in stance is a reflection of the difficulties and complexity Nigeria has in managing its unstable oil industry, among other economic issues. Debates in Nigeria have long focused on the sustainability and economic consequences of oil subsidies, making them an issue of contention. The subsidies are meant to stabilize and bring down consumer fuel prices, but they also put a significant financial strain on the state’s finances.
The viability and future of fuel subsidies in Nigeria are being discussed more widely as a result of this development. The trade-off between the nation’s long-term economic stability and the provision of instant relief to consumers through subsidies is currently being reevaluated by economists and policymakers. The significant rise in anticipated spending on subsidies highlights the difficulties the government confronts in gradually eliminating these subsidies.
