Nigeria's new president scraps fuel subsidy sparking panic-buying

By Adam Abu-Bashal

ABUJA, Nigeria (AA) - Nigeria's newly elected President Bola Ahmed Tinubu has removed a decades-old fuel subsidy policy, saying it favors only the rich and not the poor.

The announcement sparked panic-buying as private oil companies operating in the country stopped selling gasoline, and queues formed in front of state-owned gas stations.

Just a day after Tinubu took oath as Nigeria's new president, fuel prices in major cities such as the capital Abuja and Lagos rose to 600 naira ($1.30) per liter from 185 Nigerian naira ($0.40).

In his inaugural speech on Monday, Tinubu stated the fuel subsidy favors only the rich, not the poor.

The increasing costs of the subsidy are “no longer justifiable due to depleting resources,” he said. “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favored the rich more than the poor.”

The Nigerian National Petroleum Corporation (NNPC) stated that there was enough gasoline to meet the needs of the people, and there was no need to "panic."

In a press conference on Monday, NNPC CEO Mele Kyari welcomed the decision to end the subsidy.

He stated that the subsidy has been financed using the cash generated by the private company, as the government "is incapable of covering the subsidy expenses owed to the cooperation.”

Despite being Africa's second largest oil producer, Nigeria imports almost all of its fuel due to the lack of refineries.

In October 2000, the government introduced a fuel subsidy in order to reduce the cost of fuel by providing direct financial support to oil companies to facilitate the public.

In Nigeria, trillions of naira are spent annually on subsidies for petroleum products.

*Writing By Alperen Aktas in Ankara