Decision to Remove Fuel Subsidy Was Tinubu's Not Ours – IMF Clarifies

The International Monetary Fund (IMF) has officially denied any involvement in Nigeria's decision to remove its fuel subsidy.

This clarification comes amidst widespread speculation that the IMF might have influenced the policy change. The decision to eliminate the subsidy was made domestically by President Bola Tinubu, as confirmed by various sources.

President Tinubu announced the removal of the fuel subsidy during his inaugural address on May 29, 2023, stating that the subsidy could no longer justify its escalating costs given the country's dwindling resources.

He emphasized that the funds previously allocated for the subsidy would be redirected towards major investments in public infrastructure, education, healthcare, and job creation, aiming to materially improve the lives of millions of Nigerians.

The removal of the subsidy led to a substantial increase in petrol prices, from approximately ₦780 per gallon to ₦2160 per gallon, which in turn raised the overall cost of living in Nigeria. Despite initial threats of a nationwide strike by organized labor, negotiations with the Tinubu administration resulted in the unions retracting their threats.

The Nigerian government had been spending around ₦400 billion monthly to subsidize petroleum imports, a practice that many argued primarily benefited a few companies rather than the general populace. Femi Falana, a Senior Advocate of Nigeria, criticized the subsidies for diverting large sums of public funds into private hands.

The decision to end the subsidy is also seen as a step towards reducing carbon emissions, with Vice President Kashim Shettima noting that without the subsidy, Nigeria could conserve over 15 million tonnes of CO2 annually. This move aligns with the country's commitments under the Paris Agreement and is expected to decrease everyday fuel usage massively.