The administration of President Bola Tinubu has been accused of silently re-introducing the payment of fuel subsidies in Nigeria in order to keep the price of petrol stable.
The allegation was made by the International Monetary Fund (IMF) in a statement over the weekend.
TRUETELLS NIGERIA recalls President Tinubu in his inauguration speech during his swearing-in on May 29, 2023, famously announced an end to the fuel subsidy regime.
The president has since maintained that the subsidy payment is an albatross on the nation’s economy, crippling the economy and enriching a few.
The decision marked an immediate spike in the price of petrol, which went up from about N187/litre to N300, N400, and has maintained a steady increase, with most filling stations in the country currently selling above N600/litre.
The increase in petrol price has led to a sharp increase in the price of other items and commodities, including foodstuff and transportation, with many Nigerians groaning under the weight of the price increases.
However, the IMF, in a statement issued at the conclusion of its Executive Board’s Post Financing Assessment with Nigeria, however, said the Tinubu government has re-introduced subsidy through the backdoor by capping the price of fuel at retail stations.
The IMF also urged the government to completely stop the payment of subsidies on petrol to free funds to run the government.
The IMF, in its latest statement at the weekend, said the Tinubu administration has “capped retail fuel and electricity prices” ostensibly to “ease the impact of rapidly rising inflation on living conditions, thus partially reversing the fuel subsidy removal.”
According to Daily Trust, an investigation in September revealed that the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre.
The platform said a document from the Federal Account Allocation Committee (FAAC), sighted by one of its reporters, showed that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220 million (N169.4 billion at N770/$) out of the $275 million to pay for the PMS subsidy. Then NNPC held back $55 million, illegally.