During his inaugural address on Monday 29 May President Bola Ahmed Tinubu announced the end of Nigeria’s fuel subsidy. Phasing out fuel subsidy was a manifesto pledge and the decision to implement it may have been brought forward by the absence of any provision for fuel subsidy in the current government budget beyond June. (The current budget was bequeathed by the previous administration.) Subsidies for petroleum (also known as Premium Motor Spirit, PMS) are believed to have cost the government in the region of US$9.0bn last year.

Clearly, there are multiple knock-on effects – and many opportunities – stemming from fuel subsidy removal. We will look at public finances, inflation, the consumer, companies, and the stock market. Before we do this, however, we need to consider how significant fuel subsidy removal is in the context of Nigeria’s international standing. 

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