Nigeria ends fuel subsidies

Text by: RFI Follow

Nigerian consumers are hit hard by the dizzying fall in oil prices. Under strong pressure, the first African crude producer, which imports its fuel, has just decreed the end of the subsidies. A measure supposed to abolish a regime that promotes corruption and that the local oil sector has been waiting for a long time.

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With four refineries that have never operated and before the entry into production of the one just built by the Dangote group, with a capacity of 650,000 barrels per day, Nigeria imports almost all of the fuel distributed throughout the country. country.

Until now, the federal government has borne part of the costs of importing petroleum products. This allowed petrol stations to sell petrol at 145 naira per liter, or around 30 cents - for the price posted at the pump on Friday. It is twice less than in neighboring countries, such as Benin, and even three times less than in Côte d'Ivoire.

But the first African economy is plagued by corruption and this system of subsidies has enabled the diversion of several billion dollars. For three months, the significant drop in oil prices has caused Nigeria's income to fall. After the oil price bottomed out, around 20 dollars, towards the end of April, it rose again and has fluctuated around 40 dollars per barrel since the beginning of June. However, the country is expected to enter recession before the end of the year.

It is in this context that the government announced the end of fuel subsidies and promised distributors what they have been claiming for a long time: let the market determine prices at the pump.

Despite these announcements and the publication of an official circular, the government continues to impose a sales price range, which can be revised every month. And distributors are obliged to respect these fixed prices. Otherwise, they risk having their gas stations closed. Some of them therefore continue to demand total liberalization of the sector.

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• Nigeria
• Oil
• Corruption

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