Nigeria’s new president has announced the end of subsidy on petrol
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After Tinubu’s speech, people rushed towards the petrol pump. People want to do maximum storage of petrol before the subsidy ends. This created a crisis of demand and supply and the price increased three times. The President’s Office later clarified in a statement that the subsidy would expire on June 30. But this did not stop the people and the crowd continued outside the petrol pumps. Taking advantage of this opportunity, many petrol pumps started selling petrol at thrice the price. At the same time, many petrol pumps stopped selling. According to a CNN report, the country’s government company Nigerian National Petroleum Corporation (NNPC) said that retail prices have been changed. Although the company did not disclose the new prices. Petrol prices at NNPC petrol pumps in the capital Abuja nearly tripled from 42 cents a liter to $1.16 on Wednesday.
misuse of subsidy
Petrol price is low in Nigeria compared to other countries. The reason for this is that the government gives subsidy on petrol. Earlier, the government had tried to remove this subsidy in 2012, but there were widespread protests across the country against it. Due to this the government had to withdraw its steps. The government wants to deregulate the country’s oil sector and the decision to end subsidies is part of this strategy. Many experts believe that subsidy on petrol is being misused and there is huge corruption in it. There has been a demand for its closure for a long time.
The subsidy on petrol was costing the exchequer about $867 million every month. Nigeria is the largest oil producing country in Africa but the country does not have the capacity to refine oil. Due to this the country has to spend billions of dollars on the import of refined petroleum products. Nigeria is grappling with the problem of rising government spending, inflation and unemployment. Previous governments also tried to remove petrol subsidy but they did not get success. However, some experts say that the removal of subsidy will increase the difficulties of the people. Transportation cost will increase by more than 200% and crime may increase in the country.
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