adminWith petrol scarce and his fuel tank on red, taxi driver Victor Ovundah queued overnight at a gas station in Port Harcourt, Nigeria and by morning was getting close to filling up when sales suddenly stopped.
A man started going from pump to pump, tapping on each console.
The digital dashboard flashed: 897 naira (US$0,56) per litre.
The 34 000 naira needed to fill up his Toyota Corolla moments before was now 50,000 naira. A 45 percent increase in the blink of an eye.
“Our WhatsApp group for Bolt drivers was blowing up with complaints, it seemed the price change was well planned,” he said.
“How are we supposed to make a profit with this new fuel price?
“Public frustration is just one consequence for Nigeria as it once again tries to end a costly addiction to fuel subsidies.
The move could fan inflation and risks re-igniting cost-of-living protests.
But it may wean the country off a reliance on imported gasoline, which cost it around US$10 billion in 2022, just as the local refinery of billionaire Aliko Dangote starts to deliver a home-grown product.
It also gives the West African nation a chance for a do-over in efforts to end the years-long practice of providing cheap fuel.
President Bola Tinubu declared subsidies were finished after taking office in May 2023.
That decision and other reforms were cheered by observers, including the World Bank and International Monetary Fund. But they jolted inflation to a 28-year high and Tinubu quietly backtracked on fuel to dampen popular protest.
The cost of reintroducing the subsidy was left with the state-owned oil company NNPC Ltd. It’s financial statements show the decision pushed it into heavy debts owed to gasoline importers, who local media reports said have since halted supplies until they get paid.
NNPC declined to comment on whether it was raising gasoline prices, but it acknowledged reports regarding the company’s significant debt to petrol suppliers.
“This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply,” it said in a September 1 statement posted on X. – Bloomberg
Online Reporter