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Fuel queues hit Abuja, other cities as Tinubu announces subsidy removal

May 29, 2023

Fuel queues returned to Nigerian cities Monday as many motorists scrambled to get petroleum products hours after President Bola Tinubu announced that the government will put an end to the fuel subsidy regime.

Mr Tinubu on Monday in his inaugural address at Eagle Square, Abuja, declared that there would no longer be a petroleum subsidy regime as it was not sustainable.

He said the current 2023 budget only has provision for the fuel subsidy till June, adding that the funds meant for subsidies will be diverted to creation of public infrastructure, education, health care and jobs.

“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.

“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” Mr Tinubu said.

But hours after the declaration, fuel queues resurfaced in major cities across the country amid uncertainty over the effect of the new policy.

Queues

A PREMIUM TIMES correspondent who visited petrol stations around Abuja metropolis Monday evening found that queues have yet again resurfaced in the city.

Across the nation’s capital city, some filling stations were under lock and key while some were besieged by motorcyclists, tricycle owners, as well as private and commercial drivers.

Many filling stations in the Lugbe area of Abuja sold petrol at prices ranging between N194 and N198. Outside Abuja, residents said fuel stations sold petrol for N230.

On Monday evening, a long queue of motorists was observed at the NNPC filling station along Airport Road, Lugbe.

Shafa, Fynefield and NNPC fuel stations at Apo sold petrol to motorists at prices ranging between N194 and N198, while Mobil, MRS and Ashafa along Lugbe Airport Road were also open to customers.

Some other filling stations were, however, shut against motorists and tricycle riders.

A car owner, Nwekefero Munachi, at the NNPC filling station along Airport Road, Lugbe, said: “As I was driving down from town, I saw a queue at the filling station but I don’t know what the cause may be. So as I approached Lugbe, I noticed another queue. I can’t place my hand on what the queue is all about. But all I know is that there are queues in filling stations.”

The same trend was witnessed in Lagos, Ogun, and Ado-Ekiti, the capital of Ekiti State Lagos, Ogun

In Lagos, Nigeria’s commercial nerve centre, fuel queues surfaced around the Ojodu and Berger axis Monday evening as motorists scrambled to get fuel ahead of resumption of work Tuesday.

A commercial motorcyclist, Ibrahim Adeleke, said he noticed the queues about two days ago but things got worse Monday after Mr Tinubu said the subsidy regime has ended.

“People don’t know what will happen and petrol station owners too are not certain of what the new government will do,” he said.

In Akute area of Ogun State, PREMIUM TIMES learnt that some of the popular fuel stations were shut Monday evening.

Ekiti

In Ekiti, there were long queues at some of the major fuel stations visited. The filling stations were seen dispensing petrol at N230 while many remained shut.

At the Furasat filling station Okebareke, in Ido Ekiti, Tunde Ajayi, a motorist at the station, attributed the fuel queue to subsidy removal.

“This is surprising, people have started panic buying just with the announcement of subsidy removal.

“We used to buy it for N230 per litre before and now it is still the same price but people already believe that with the president’s announcement fuel price might go up,” Mr Ajayi said.

“I’m here to buy and store so I can manage it before the filling station starts increasing their litre price,” he added.

Kenneth Onyebuchi, a civil servant said: “I’m not sure this is because of the subsidy removal announcement, I think this is because of the long holiday. You know tomorrow is work so I just think people are just coming out to fill their cars.

“If it’s because of what the president said we will know within the week,” he said.

A car owner, John-wisdom Nwali, said “As I was driving towards my house, I observed a queue in the filling stations and I decided to stop and refill my tank. Another round of fuel scarcity should not be encouraged in this regime because we have suffered a lot in Buhari’s tenure because of scarcity.

“I heard that this recent queue is caused by the government announcement of removing fuel subsidies but I don’t know how true it is,” he said.

Fuel subsidy

The Nigerian government has, for decades, subsidised fuel and fixed retail prices of petroleum products. The payment has, however, threatened the nation’s fiscal position and impacted the government’s ability to fund developmental projects across the nation.

In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a monthly N5,000 transport grant for poor Nigerians.

But the government later suspended the plan after the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) threatened to embark on mass protests.

The Minister of Finance, Zainab Ahmed, in January last year said the government had realised the timing of its planned removal of petrol subsidy is “problematic”, and will worsen the suffering of Nigerians.

She said the government will retain fuel subsidy indefinitely and will work on amending the 2022 budget to provide funds for that purpose. The government added that it would spend N3 trillion on subsidies in 2022.

In the first quarter of 2023, Mrs Ahmed said that it will be more appropriate for the government to begin the implementation of its fuel subsidy policy in the second quarter of the year. She noted that the country needs to exit the fuel subsidy regime because it is a very significant contributory factor to revenue loss.

As concerns were raised over the sustainability of the subsidy regime, the Nigerian National Petroleum Company Limited (NNPCL) also announced that the country was spending over N 400 billion monthly on petroleum subsidies.

The government subsequently said that it will phase out the subsidy regime by the end of the first half of the year.

But in April, the National Economic Council (NEC) suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration.

Mrs Ahmed said that the council deliberated on the matter and resolved that the subsidy cannot be removed for now.

On Monday, Mr Tinubu announced that the subsidy regime has ended because it’s not sustainable. (Premium Times)

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