In Nigeria, the removal of gasoline subsidies, initiated shortly after President Bola Tinubu took office in May 2023, has already saved the Government nearly $20 billion, according to official reports. Moving forward, authorities project annual savings of approximately $7.5 billion from this measure, despite its unpopularity due to the significant rise in fuel prices.
Finance Minister Wale Edun emphasized the economic benefits of the subsidy removal during remarks in Abuja, stating, “These subsidies were costing us 5 percentage points of GDP.” The funds saved are now being redirected toward critical development sectors, including health, agriculture, and education, Edun explained. Sunday Dare, a special adviser to President Tinubu, reinforced the significance of the measure, noting that it offers a sustainable financial boost to the nation’s coffers.
Despite these economic gains, the subsidy removal has faced criticism for its immediate impact on the cost of living and fuel affordability. The national oil company, frequently criticized for its opaque management of fuel imports, has also been under scrutiny for its insufficient support of local fuel production.
On Tuesday, November 26, the Port Harcourt refinery marked a significant milestone by resuming operations after undergoing extensive rehabilitation. Initially, it will produce around 60,000 barrels of refined fuel per day, with plans to gradually increase capacity to its full potential of 250,000 barrels per day.
Rehabilitation efforts are also ongoing at two other state-owned refineries in Kaduna and Warri. Once operational, the combined output of the three facilities is expected to reach 400,000 barrels of refined fuel per day, a figure that could meet Nigeria’s domestic demand and reduce dependence on costly fuel imports.
While the subsidy removal is positioned as a bold step toward fiscal stability and infrastructure development, its success hinges on addressing public dissatisfaction and ensuring the long-term sustainability of domestic fuel production.