Fuel Subsidy Removal Results in N400 Billion Savings for Nigerian Government in Four Weeks, Say Operators

In a significant development within Nigeria’s downstream oil and gas sector, operators have revealed that the federal government has amassed a staggering sum of N400 billion in the past 30 days following the removal of fuel subsidy.

Chinedu Okonkwo, the National President of the Independent Petroleum Marketers Association of Nigeria, disclosed this in an interview with DAILY POST on Friday. This revelation comes after Mele Kyari, the Group Chief Executive Officer of the Nigerian National Petroleum Corporation Limited, highlighted in a meeting with oil and gas operators earlier this year that the country was spending N400 billion monthly on fuel subsidies.

Okonkwo discussed the current state of the sector following the subsidy removal and the recent changes in Nigeria’s foreign exchange market. He emphasized that while the deregulation had an immediate impact, its long-term effects were noteworthy. The market-determined price of foreign exchange would now determine whether fuel prices would increase or decrease.

Furthermore, Okonkwo mentioned that the introduction of Compressed Natural Gas (CNG) into the sector would gradually alleviate the impact on the masses. By leveraging CNG as an alternative, the government aims to reduce expenditure on fuel subsidies while providing a viable solution for consumers.

He stated, “You know how much the government is spending monthly on fuel subsidies payment, but that expenditure to the tune of dollars or Naira will be saved. The government has indeed reduced spending on fuel subsidies, though the thing is biting, so we have drafted an alternative in Compressed Natural Gas, CNG.”

The removal of fuel subsidies has enabled the Nigerian government to accumulate significant savings, paving the way for potential economic developments and alternative energy solutions. The long-term effects of this policy change remain to be seen as the government continues to navigate the evolving dynamics of the oil and gas sector.