How Nigerians are coping with the fuel subsidy removal and price hike

Nigeria, Africa’s largest oil producer, has been struggling with the economic and social consequences of removing the fuel subsidy on Premium Motor Spirit (PMS), also known as petrol. The subsidy, which was introduced in the 1970s to keep fuel prices low for consumers, had become a huge fiscal burden for the government, costing about $10 billion in 2020. President Bola Tinubu announced the end of the subsidy on May 29, 2023, during his inauguration speech, saying that "the Fuel Subsidy is gone!"

The removal of the subsidy has led to a sharp increase in fuel prices across the country, reaching as high as 1000 naira ($1.00) per litre in some states, compared to 167 naira ($0.21) per litre before the subsidy was scrapped. This has resulted in higher costs of transportation, electricity, and other goods and services that depend on fuel. According to the National Bureau of Statistics, the inflation rate rose to 32.7% in October 2023, the highest since 2017.

The fuel price hike has also sparked public discontent and protests, especially among low-income and middle-class Nigerians who rely on PMS for their daily needs. Many Nigerians have accused the government of being insensitive and irresponsible for removing the subsidy without providing adequate alternatives or palliatives for the masses. Some have also questioned the rationale behind subsidizing PMS, which is mainly used by richer households, while neglecting kerosene, which is used by poorer households for cooking and heating.

However, some Nigerians have also expressed support for the subsidy removal, arguing that it is a necessary step to reform the oil sector and reduce corruption and inefficiency. They have pointed out that the subsidy was not benefiting the majority of Nigerians, but rather enriching a few oil marketers and smugglers who exploited the price differential between Nigeria and neighboring countries. They have also suggested that the savings from the subsidy removal could be used to invest in infrastructure, health, education, and social welfare programs.

In response to the challenges posed by the fuel subsidy removal and price hike, many Nigerians have adopted various coping strategies to adjust to their new economic realities. Some of these strategies include:

Using alternative modes of transportation: Some Nigerians have opted for cheaper and more efficient modes of transportation, such as motorcycles, tricycles, bicycles, and buses, instead of using their personal cars or taxis. Some have also resorted to carpooling or ride-sharing services to reduce their fuel expenses.

Walking longer distances: Some Nigerians have decided to walk more often to their destinations, especially for short distances, instead of paying for transport fares. This has also helped them to improve their physical fitness and health.

Reducing electricity consumption: Some Nigerians have reduced their use of electricity by switching off appliances that are not in use, using energy-saving bulbs, and relying more on solar panels or generators. Some have also switched to prepaid meters to monitor their electricity consumption and avoid paying estimated bills.

Cutting down on non-essential spending: Some Nigerians have cut down on their spending on non-essential items, such as entertainment, clothing, eating out, and travel. They have also prioritized their needs over their wants and focused on saving more money for emergencies.

Seeking alternative sources of income: Some Nigerians have sought alternative sources of income to supplement their regular income or cope with unemployment or underemployment. Some have started small businesses or side hustles, such as selling goods or services online or offline, while others have learned new skills or enrolled in training programs to improve their employability.

The fuel subsidy removal and price hike in Nigeria has been a controversial and contentious issue that has affected millions of Nigerians in different ways. While some have supported the government’s decision as a necessary reform measure, others have opposed it as a harsh and unfair policy. However, regardless of their views on the issue, many Nigerians have shown resilience and adaptability by coping with the changes in their economic environment.