IMF Exposes Tinubu’s Secret Fuel Subsidy Reversal

The International Monetary Fund (IMF) has accused the administration of President Bola Tinubu of secretly re-introducing the payment of fuel subsidies in Nigeria, despite his public declaration of ending the regime.

The IMF made this allegation in a statement released over the weekend, after its Executive Board’s Post Financing Assessment with Nigeria.

Naija News recalls that President Tinubu, in his inauguration speech on May 29, 2023, announced that his government would stop paying subsidies on petrol, which he described as a burden on the nation’s economy and a source of corruption. The announcement led to a sudden hike in the price of petrol, which rose from about N187/litre to N300, N400, and has continued to increase, with most filling stations in the country currently selling above N600/litre.

The high cost of petrol has also affected the prices of other goods and services, including food and transportation, making life more difficult for many Nigerians.

However, the IMF, in its statement, revealed that the Tinubu government has quietly resumed the payment of subsidies on petrol by capping the price of fuel at retail stations. The IMF also claimed that the government has capped the prices of electricity to cushion the effect of inflation on the living standards of Nigerians, thereby partially reversing the fuel subsidy removal.

The IMF urged the government to completely abolish the payment of subsidies on petrol and electricity, and use the funds to run the government and support the economic recovery.

The IMF said that the Tinubu administration has “capped retail fuel and electricity prices” ostensibly to “ease the impact of rapidly rising inflation on living conditions, thus partially reversing the fuel subsidy removal.”

Daily Trust reported that an investigation in September showed that the federal government paid N169.4 billion as subsidy in August to keep the pump price at N620 per litre.

The report said that a document from the Federal Account Allocation Committee (FAAC), seen by one of its reporters, indicated that in August 2023, the Nigerian Liquefied Natural Gas (NLNG) paid $275m as dividends to Nigeria via NNPC Limited. NNPC Limited used $220 million (N169.4 billion at N770/$) out of the $275 million to pay for the PMS subsidy. Then NNPC withheld $55 million, illegally.