The move is necessary but confusion reigns
Nigeria has spent a fortune subsidising petrol since the 1970s. It was supposed to be a temporary measure, but the cost has swelled, while the mechanics have become opaque. The state oil firm, the Nigerian National Petroleum Corporation , does a fiddly set of transactions, swapping some of the crude oil it pumps for refined fuels on global markets, which it then resells at a discount to Nigerians. Any cash left over is remitted to the government.
Since Mr Tinubu’s declaration, prices at the pump have soared, even though the subsidy is supposedly in place until the end of this month. In some areas thehas nearly tripled the price of petrol to 557 naira , up from 189 naira. This will push up inflation, already running at 22%. Taxi fares in many cities doubled overnight. Sarah Bature has doubled the price of the cabbages that she sells at a market in Abuja. They are trucked in each day. “What else can I do?” she demands.
The unions promptly announced that they would strike in protest from June 7th but suspended their plan after the government obtained a court injunction to stop it, pending a further hearing. The unions at least seem willing to negotiate. They want other measures to soften the crunch, such as a rise in the minimum wage.
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