President Muhammadu Buhari has provided an explanation for why his government decided to continue providing fuel subsidies.
Buhari claimed in an interview with Bloomberg that the consequences of eliminating fuel subsidies would have been too severe for Nigerians.
In order to reduce inflationary pressures, the President also stated that efforts were being made to increase local capacity.
Buhari claimed that most western countries are implementing fuel subsidies and added that “what is good for the goose is good for the gander”.
According to him, “My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable.
“Boosting internal production for refined products shall also help. Capacity is due to step up markedly later this year and next, as private players and modular refineries come on board.”
Buhari also explained that the exchange rate is very much “susceptible to external shocks that can suddenly and severely affect Nigerians”, but added that “as we step up domestic production – both in fuel and food – the inflationary threat shall diminish, and we can move toward unification.”
There is currently fuel scarcity in Lagos and other parts of the country.
Consumers are spending as high as N300/litre to buy the product in the black market.