Are we Back to Square One? Obasanjo Says Subsidy is Back

According to the Former President of Nigeria, Olusegun Obasanjo, Just when we thought the fuel subsidy in Nigeria was cut off, they made a surprising comeback, and not in a straightforward way! 

Last year, when the government stopped the fuel subsidy during President Bola Tinubu’s inaugural address on May 29, 2023, declared that fuel subsidy “is gone.” The prices at the pump shot up from about N200 to over N600 per litre. 

It was a move that was supposed to save the nation billions. However, according to Obasanjo, this plan hasn’t panned out as expected because of rising inflation rates. He revealed in an interview with the Financial Times that, despite the government’s efforts, the subsidy is back, indirectly, thanks to inflation.

But there’s more to the story. The Dangote Petroleum Refinery, Africa’s largest oil refinery, spearheaded by Nigeria’s richest man, Aliko Dangote is a massive $20 billion project that has the potential to change the game for Nigeria’s oil industry by cutting down on the need for imported fuel. 

However, it’s facing big hurdles. Obasanjo hinted that there’s a tug-of-war going on behind the scenes. 

He suspects that the current fuel importers, who have been cashing in big time, aren’t happy about losing their golden goose and might be trying to throw wrenches in Dangote’s works.

In fact, officials from the Dangote Group have been vocal about their struggles, accusing some international oil companies of not playing fair. They claim these companies are either refusing to sell crude oil to them or are charging them premium prices. 

To make matters worse, accusations are flying about that the Nigerian Midstream and Downstream Regulatory Authority is playing favorites by allowing some to import lower-quality fuel, which directly competes with Dangote’s product.

And while all this is happening, the government’s promise to sell crude oil to local refineries like Dangote’s in naira, which could lower costs and help stabilize our currency, hasn’t quite kicked off yet.

It’s been a week since this announcement, and the refineries are still waiting to hear from the Nigerian National Petroleum Company Limited.