By Editor
Introduction: The “Pain Before Gain” Promise Turns to Ashes
In May 2023, President Bola Tinubu swiftly took office with an agenda to shake Nigeria’s economy. One of his boldest moves, which he announced almost immediately after being sworn in, was the removal of the controversial fuel subsidy. His campaign had promised relief for millions of struggling Nigerians, with Tinubu portraying himself as the leader who would cut through inefficiency and reduce fuel prices. Yet, in a dramatic and cruel twist, the opposite has unfolded. Fuel prices, which stood at N175 per litre when Tinubu took office, have now ballooned to N1,030 per litre by October 2024, a staggering 488% increase in just 16 months. This has plunged millions of Nigerians deeper into poverty, with the pain of economic hardship far outweighing any perceived gain.
This report critically analyses the systemic economic missteps, the broken promises of President Tinubu’s administration, and the dire consequences Nigerians are enduring. It also raises important questions about the government’s accountability and offers potential solutions that could halt this economic descent.
The Bold Move: Fuel Subsidy Removal and the Immediate Economic Fallout
President Bola Tinubu’s decision to remove the fuel subsidy was touted as an economic masterstroke. The subsidy, costing billions of dollars annually, was perceived as a drain on the government’s revenue, enriching a few at the expense of the masses. However, the abruptness with which this decision was carried out, without any significant safety nets for the millions of vulnerable citizens, triggered a massive economic shock.
Almost immediately, petrol prices skyrocketed from N175 to over N500 per litre. The knock-on effects were swift and devastating. Transport costs surged, food prices soared, and inflation spiraled out of control. The government’s promise that this would be a “short-term pain for long-term gain” felt hollow, as the masses faced increasing hardships, with no clear end in sight.
From Promise to Reality: Tinubu’s Campaign Vow to Reduce Petrol Prices
During his campaign, Bola Tinubu made a promise that many Nigerians would not forget—he vowed to bring down the price of petrol. Speaking in Abeokuta, Ogun State, Tinubu confidently assured his supporters that the rising fuel costs, exacerbated by the outgoing Buhari administration, would be addressed under his leadership. His words were unequivocal: “They said there would be a fuel price hike… Put your mind at rest; we will bring it down.”
Yet, just over a year later, that promise has not only been unfulfilled, but the situation has worsened dramatically. The masses who once saw him as a messiah are now burdened with fuel prices that are breaking their backs, with no sign of reprieve on the horizon.
The Devastating Impact on Nigerians
For most Nigerians, the price of petrol is not just about fuel for cars; it is the lifeblood of daily existence. In a nation where over 85 million people live without regular access to electricity, petrol powers everything from generators to small businesses. The escalating cost of fuel means fewer hours of light for families, reduced productivity for businesses, and a general decline in the quality of life for millions.
Furthermore, Nigeria’s economy is heavily reliant on transportation, which in turn depends on affordable fuel. With petrol prices surging beyond N1,000 per litre, the cost of transportation has become prohibitively expensive for many Nigerians. This has caused the prices of goods and services to climb dramatically, further eroding the already limited purchasing power of the average citizen.
The Naira’s Freefall: The Second Blow
Compounding the problem of rising fuel prices is the simultaneous devaluation of the naira. In June 2023, just weeks after taking office, Tinubu’s government floated the naira, allowing market forces to determine its value. This policy, aimed at stabilizing the currency in the long run, has instead led to a rapid and uncontrolled devaluation. The naira, which was trading at N400 to the dollar before the float, quickly plummeted to over N700 and now stands at well above an eye-watering N1,600 per dollar as of October 2024.
This has exacerbated the petrol price crisis. Since Nigeria imports the majority of its refined petroleum products, the cost of fuel is directly tied to the exchange rate. As the naira weakened, the price of petrol increased, creating a vicious cycle where both inflation and currency devaluation feed off each other, plunging Nigerians deeper into economic despair.
The Hidden Return of Fuel Subsidies?
Despite the public stance on the removal of fuel subsidies, there have been growing suspicions that the government, through the Nigerian National Petroleum Company Limited (NNPC), has reintroduced subsidies through the back door. While the official pump price of petrol has hovered around N600 for much of the past year, many analysts believe that this was far below the actual landing cost, which was closer to N1,200 per litre. The NNPC’s own Chief Financial Officer, Umar Ajiya, admitted as much when he explained that the government was covering the difference between the actual cost and the pump price through “under-recovery.”
This half-hearted subsidy regime has done little to stabilize the fuel market. Instead, it has created confusion, with Nigerians unsure of whether they are paying a subsidized or unsubsidized price. As fuel prices continued to rise—reaching N1,030 in October 2024—the government’s inability to manage the situation effectively became painfully clear.
Dangote Refinery: A False Dawn?
Much hope was placed on the Dangote Refinery, Africa’s largest privately-owned refinery, which was expected to revolutionize Nigeria’s petroleum industry by reducing the country’s dependence on imported fuel. In September 2024, the NNPC began lifting petrol from the Dangote Refinery, raising expectations that this would lead to a significant reduction in fuel prices.
However, the opposite has happened. Instead of lower prices, the NNPC announced yet another hike, with petrol now selling for as much as N1,119 per litre in some states. This has raised concerns about the refinery’s capacity to meet domestic demand at competitive prices, and whether Nigeria will ever break free from its reliance on imported fuel.
The Resurfacing of Fuel Queues: A Grim Reminder
One of the most troubling developments in recent months has been the return of long fuel queues, a sight that Nigerians had hoped to leave behind. Despite the high prices, many filling stations have struggled to maintain a steady supply of petrol, leading to widespread shortages. This has not only frustrated consumers but also raised questions about the government’s ability to ensure a stable fuel supply.
The NNPC, which until recently was the sole importer of petrol, has admitted to financial difficulties, acknowledging that it owes significant sums to its suppliers. The company’s spokesperson, Olufemi Soneye, stated that these debts had placed immense pressure on the company, threatening its ability to maintain fuel supplies.
Public Outcry and Labour Protests
Unsurprisingly, the repeated fuel price hikes have sparked widespread public outrage. The Nigeria Labour Congress (NLC) and other civil society organizations have led protests across the country, calling on the government to reverse the price increases. In August and October 2024, thousands of Nigerians took to the streets, demanding an end to bad governance and economic hardship.
Joe Ajaero, President of the NLC, described the situation as “an aberration” and criticized the NNPC’s role as both a regulator and a player in the fuel market. He called for a return to subsidies or, at the very least, a significant reduction in fuel prices, arguing that the government’s policies were driving millions of Nigerians deeper into poverty.
The Path Forward: Solutions or More Hardship?
With Nigerians at breaking point, the question remains: what can be done to reverse the damage caused by Tinubu’s economic policies? Critics argue that the government must take immediate steps to alleviate the suffering of the masses. Some of the solutions being proposed include:
- Reintroducing Fuel Subsidies: While the removal of subsidies was intended to free up funds for infrastructure development, the reality is that most Nigerians cannot afford petrol at current prices. Reintroducing targeted subsidies could provide immediate relief.
- Supporting Local Refineries: Encouraging the development of smaller, privately-owned refineries could reduce Nigeria’s dependence on imported fuel and create a more competitive market, driving prices down in the long run.
- Exploring Alternative Energy Sources: As global energy markets shift towards renewables, Nigeria must diversify its energy portfolio. Investing in solar, wind, and other sustainable sources of energy could reduce the nation’s reliance on petrol.
Public Outcry: Unheeded Cries for Relief
The Nigerian masses have not been silent in the face of escalating fuel prices, and the ripple effects that have cascaded through the economy. Citizens across the nation have taken to the streets in protest against what many perceive as economic oppression under the guise of reform. Youths, labour unions, and even the Organised Private Sector (OPS) have staged repeated demonstrations demanding that the government revert to the pre-subsidy removal pricing structure.
In the months following President Bola Tinubu’s decision to remove the fuel subsidy and float the naira, public frustration reached a boiling point. The Nigeria Labour Congress (NLC), led by Joe Ajaero, has been particularly vocal, condemning the government for its failure to cushion the harsh impacts of the price hikes on ordinary Nigerians. In one of his fiery statements, Ajaero called the NNPCL’s latest increase an “aberration” and criticised the Tinubu administration for allowing a supposedly privatised entity to dictate national pricing policy.
“This is nothing but a spasmodic, reactionary approach to economic management,” Ajaero lamented. “The government must present a blueprint for inclusive growth, rather than these hollow, piecemeal interventions that only deepen poverty and hardship.” Ajaero’s words encapsulate the sense of betrayal many Nigerians feel. To them, the promised prosperity is an illusion, and their economic suffering has only deepened under the new administration.
The Economic Fallout: A Chain Reaction of Misery
The ramifications of skyrocketing petrol prices extend beyond the pump. The transport sector has been one of the most visibly affected, with commercial drivers passing the cost onto passengers. A journey that cost N500 in early 2023 now demands N2,500 or more. Markets, once bustling with activity, have seen a reduction in purchasing power, with goods becoming prohibitively expensive for the average consumer.
The devaluation of the naira exacerbated the problem. With the exchange rate hitting a record low of N1,600 to the dollar, importers—who rely on foreign currencies to bring in goods—have raised their prices dramatically. Inflation has surged, and for the majority of Nigerians, wages remain stagnant, leaving families unable to cope with the spiralling cost of living.
Rural communities, often the most vulnerable, have suffered disproportionately. In areas where access to electricity is limited, petrol-powered generators have been a lifeline. Now, with fuel prices over N1,000 per liter, many can no longer afford to power their homes or businesses. The result is a growing gap between the haves and the have-nots, as even basic necessities like electricity and transportation are increasingly out of reach.
Tinubu’s Administration: Broken Promises and Damaged Trust
For President Tinubu, the optics of this economic decline are devastating. During his campaign, he promised a better life for all Nigerians, stating unequivocally in Abeokuta that petrol prices would come down under his leadership. “Put your mind at rest,” he assured his supporters. “We will bring it down.” This message, delivered in Yoruba, was met with jubilant cheers from the crowd, who believed they were witnessing the dawn of a new, prosperous era.
Yet, 16 months into his presidency, the opposite has occurred. Tinubu’s rapid removal of the subsidy, coupled with the free-floating of the naira, triggered a series of economic shocks from which the country has yet to recover. His administration’s lack of a coherent strategy to manage these changes has led to growing disillusionment among the public, who feel that they were sold a false bill of goods during the election.
In response to the increasing backlash, the Tinubu administration has attempted to shift the narrative, emphasising that the current hardships are temporary and that relief is on the horizon. Presidential aides have repeatedly claimed that these economic measures are necessary to “reset” the economy, but the tangible benefits they promise seem distant to the millions of Nigerians struggling to make ends meet.
NNPC Ltd: The Perils of Monopoly and Poor Communication
A critical factor contributing to the growing crisis has been the role of NNPC Ltd., Nigeria’s state-owned oil company. Despite its transformation into a “limited liability” company, NNPC continues to act as a monopolistic force in the petroleum sector. Its dominance in the market has meant that its decisions—whether to increase prices, manipulate supply, or enter new pricing arrangements—have a far-reaching impact on the lives of ordinary Nigerians.
Yet, NNPC’s communication with the public has been opaque at best, and deceptive at worst. When reports first surfaced of the company’s growing debt to PMS suppliers, NNPC officials were quick to issue denials. “NNPC Ltd does not owe the sum of $6.8 billion to any international trader(s),” the company’s spokesperson, Olufemi Soneye, claimed. However, within weeks, the company was forced to admit that it did, indeed, owe suppliers. This was a troubling revelation, as it suggested that NNPC was financially overextended, placing the sustainability of the nation’s fuel supply at risk.
Soneye’s subsequent admission that the company had been selling petrol at below market price to avoid public backlash only deepened the controversy. As NNPC hiked petrol prices from N600 to N855 per liter, with projections suggesting further increases to as high as N1,030, many Nigerians began to question whether the company was capable of fulfilling its mandate to provide affordable fuel to the populace.
This growing mistrust in NNPC has been compounded by the lack of transparency surrounding its dealings with Dangote Refinery. While the refinery’s much-anticipated entry into the market was supposed to bring relief, NNPC’s decision to retain its role as the sole off-taker of Dangote’s PMS has raised concerns that the promised competitive pricing will not materialise. Nigerians are left in the dark, as both NNPC and Dangote Refinery remain silent on the specifics of their agreement.
The Role of the Dangote Refinery: Hope or Mirage?
The Dangote Refinery has long been touted as Nigeria’s solution to its fuel supply challenges. Positioned as the largest single-train refinery in the world, with a capacity to process 650,000 barrels per day, the refinery was expected to reduce Nigeria’s dependence on imported petrol and, by extension, stabilise prices. However, as the months have passed, these hopes have begun to fade.
While the refinery officially began operations in September 2024, its impact on fuel prices has been minimal. Instead of driving down costs, the entry of Dangote’s petrol into the market has coincided with further price hikes. Speculation is rife that Dangote Refinery, in its bid to recoup its massive investment, is selling PMS at prices that are not much lower than the global market rate, leaving Nigerians without the relief they had anticipated.
Moreover, NNPC’s decision to retain control over the bulk of Dangote’s output has stifled competition in the sector. Independent marketers, who were expected to drive prices down through market forces, have been unable to access Dangote’s supply, leaving the state-owned oil giant in control of pricing. This monopolistic arrangement has sparked fears that, instead of breaking the stranglehold of foreign imports, Nigeria’s petroleum market may be entering a new era of domestic monopoly.
Experts Weigh In: Calls for Policy Reforms and Accountability
Economists and industry experts have been vocal in their criticism of the Tinubu administration’s handling of the fuel crisis. Many have pointed out that the simultaneous removal of fuel subsidies and the floating of the naira was a recipe for disaster. Eche Idoko, spokesperson for the Crude Oil Refinery Owners Association of Nigeria, suggested that the government should have staggered its reforms to prevent the kind of economic shock that the nation is currently experiencing.
Idoko also emphasized the importance of supporting local refineries, calling for crude oil to be sold to them at a fixed rate of N1,000 per dollar. This, he argued, would enable Nigerian refineries to produce petrol at lower costs, reducing the country’s reliance on imports and stabilising prices in the long run.
Other analysts have called for a complete overhaul of NNPC’s role in the petroleum sector. They argue that the company’s monopoly has stifled competition and prevented the market from functioning efficiently. By allowing independent marketers to access Dangote Refinery’s output and compete on price, the government could create the conditions necessary for lower fuel costs.
However, such reforms seem distant, as the Tinubu administration appears to be doubling down on its current approach. For many Nigerians, this is a bitter pill to swallow, as they watch the promises of lower fuel prices slip further out of reach.
Conclusion: A Nation on Edge, A Government on Trial
As Nigerians grapple with the harsh reality of rising fuel prices and a rapidly devaluing naira, the Tinubu administration finds itself at a critical juncture. The President’s campaign promise to bring down petrol prices has not only been broken but spectacularly reversed, with prices rising by an unprecedented 488% in just over a year.
The removal of the fuel subsidy and the floating of the naira have left Nigerians reeling, with inflation surging, wages stagnating, and essential services becoming more expensive by the day. The government’s inability to communicate a clear, cohesive strategy for addressing these challenges has only deepened public frustration and mistrust.
As protests continue to erupt across the nation and labour unions threaten further strikes, the Tinubu administration faces mounting pressure to take decisive action. Whether through reversing the price hike, reforming NNPC, or finding new ways to support local refineries, one thing is certain: the status quo is unsustainable.
For now, Nigerians wait with bated breath, hoping for the relief that seems so elusive. The promise of lower petrol prices, once a cornerstone of Tinubu’s campaign, has become a symbol of broken trust. And unless the government can restore faith in its leadership, the current crisis may only be the beginning of a much deeper, more profound economic and political reckoning.
With reporting from Taiwo Adebowale, Atlantic Post Senior Business Correspondent
