In recent developments, the Nigerian government appears to be gearing up for the introduction of a new temporary subsidy structure for Premium Motor Spirit (PMS), commonly known as petrol. Sources within the presidency have indicated that plans are in motion to address the growing concerns about fuel prices.

Amidst speculations that petrol prices could skyrocket to N720 per liter in the coming weeks, the Nigerian National Petroleum Company Limited (NNPCL) has publicly stated its intention to keep fuel prices steady. Despite market indicators suggesting an impending price hike due to the weakening value of the naira against the dollar, the NNPCL is assuring consumers that fuel will continue to be available at N588 and N617 across its stations.

The underlying issue at hand is the potential adverse impact of further fuel price increases on Nigerians who are already grappling with the high cost of living brought about by the removal of subsidy.

The Nigerian Labour Congress has already expressed its readiness to launch an indefinite strike if fuel prices surge once more.

In light of this, the federal government is reportedly formulating a plan to provide certain subsidies, aiming to prevent fuel prices from surpassing their current levels.

President Bola Tinubu, who initially announced the removal of fuel subsidies in May, asserted recently that fuel prices will remain unchanged. He however emphasized his commitment to maintaining the competitiveness of Nigeria’s petroleum industry. During a press briefing held at the State House, Ajuri Ngelale, the President’s spokesperson, called for a measured approach and urged all parties to avoid hasty judgments, given the labor movement’s recent threats.

The removal of fuel subsidies has placed the government in a challenging position, particularly in conjunction with the deregulation of the foreign exchange (FX) market, which has caused the naira to significantly depreciate against the dollar, reaching N950. Despite Tinubu’s affirmation of the continued deregulation policy and his assertion that Nigeria’s fuel prices are the most cost-effective in the West African region, his promise of stable fuel prices is believed to be supported by a fresh subsidy scheme that the NNPCL is set to execute.

This envisaged temporary subsidy, if put into effect, appears to be inspired by the actions of the Kenyan government, which responded to public outcry by reinstating a subsidy on petrol. In Kenya, the Energy and Petroleum Regulatory Authority (EPRA) has directed oil marketing companies to receive compensation from the Petroleum Development Fund, thereby keeping the maximum retail price for a liter of petrol steady at 194.68 Kenyan shillings ($1.35) to shield consumers from a potential increase of 7.33 shillings ($0.05).

Details about the implementation of Nigeria’s subsidy plan remain unclear, with some speculating that it could involve stabilizing the naira in the FX market and possibly providing oil importers with subsidized FX rates. Tinubu, in his capacity, is urging patience and vowing to maintain transparency on matters such as foreign exchange challenges stemming from the Central Bank of Nigeria’s past management.

In a landscape fraught with economic challenges, Nigeria faces the intricate task of balancing fuel prices, subsidies, and overall economic stability. As the government navigates this complex path, the hopes of the populace for relief from mounting living costs hang in the balance.