Gasoline prices have more than doubled in Nigeria due to the removal of a subsidy on petroleum products by the new government, dealers of the commodity said Wednesday.
Dealers across the country are currently selling gasoline at between 500 to 750 Nigerian naira per liter ($1.08 to $1.52) instead of the NGN195 a liter approved by the previous administration.
Long queues of cars and motorbikes have formed at filling stations across the country despite the new prices.
“I have been on the queue for gasoline for three hours, it’s not my turn yet even [with] the new exorbitant prices for gasoline,” said Tunde Babalola, a cab driver in Ibadan, the largest city in Oyo state in the country’s southwest region.
The spokesman of Nigerian oil company NNPC said in a statement that it has adjusted gasoline prices across retail outlets, without providing specific figures.
Nigeria’s newly appointed president, Bola Ahmed Tinubu, said Monday that his administration had abolished a subsidy on petroleum products including gasoline sold to Nigerians. The new administration hasn’t set any price for gasoline per liter.
The subsidy, that has been in place for several years, made imported petrol cheaper than its actual landed cost and it has been a huge drain on government revenue, according to the NNPC.
The previous administration said before leaving office on Monday that funds for the subsidy would run out in June and that no provision had been made to renew it in the current national budget after that.
The chief executive of the NNPC, Mele Kyari, said last week that subsidy bills were in excess of 400 billion naira ($864.5 million) every month for the federal government. President Tinubu said in his inaugural speech that funds from the subsidy would be redirected to provide better infrastructure and spent on education, health, agriculture and maintaining security.
Nigeria has four state-run refineries with total production capacity of 450,000 barrels a day, but the NNPC imports nearly all of the country’s petroleum products because its refineries aren’t functioning.
A new refinery in Lagos, the $18,5 billion Dangote facility, is expected to begin production in July and could meet all of Nigeria’s petroleum products requirements and export the excess, according to Aliko Dangote, chairman of the Dangote Group.
