The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has ruled out any possibility of the Federal Government reintroducing fuel subsidy, despite mounting public outcry over the severe cost-of-living pressures triggered by its removal.
Oyedele made the statement on Tuesday, May 5, in Paris, France, during a meeting with global investors alongside President Bola Tinubu.
The minister argued that subsidies create economic “distortions” and insisted that the government would not introduce price controls because it believes in allowing the market to regulate itself.
“We will not bring back fuel subsidy because it creates distortions for the economy, and we won’t introduce price control because we believe in the market… the situation in Iran presents new opportunities for us as the world looks to diversify sources of energy and invest in new markets,” Oyedele said.
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Since the removal of the petrol subsidy in May 2023, Nigeria’s inflation rate has surged dramatically, hitting a 19-year high. Headline inflation jumped from 22.41% in May 2023 to 34.19% by June 2024, driven by sharply higher fuel, food and transportation costs.
Food inflation alone exceeded 39% by October 2024. The combined effect of subsidy removal and currency devaluation pushed transport costs up by nearly 300%, worsening poverty levels across the country.
President Tinubu, addressing the investors earlier, claimed that Nigeria has achieved foreign exchange stability following what he called the removal of the “burden” of fuel subsidy.
“Subsidy that was a burden to the entire country, was removed and ever since we have achieved FX stability,” Tinubu told the investors, according to a statement by his Special Assistant on Social Media, Dada Olusegun.