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Nigeria to distribute grains, fertiliser to soften impact of rising fuel prices

By Felix Onuah

ABUJA (Reuters) – Nigeria plans to distribute grains and fertiliser from Monday and raise salaries of government workers, the vice president’s office said, in a bid to cushion the impact of ending a subsidy on petrol that has worsened a cost of living crisis in Africa’s largest economy.

The grain and fertiliser distribution will be through the central bank, the vice president’s office said in a statement, adding that state governors have backed the plan. It did not give details on the measures.

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Last week, the Senate approved a request by President Bola Tinubu to borrow $800 million from the World Bank to help address rising fuel prices after stopping a popular but costly petrol subsidy in May.

Nigerian petrol prices reached 617 nairas ($0.78) per litre on Tuesday, the highest ever. The subsidy had kept prices cheap for decades but became increasingly expensive, costing the government $10 billion last year.

The government intends to deploy mass transit powered by natural gas and set up autogas conversion plants in the short-term and electric buses and cars with charging infrastructure across the country, it said.

Tinubu is embarking on Nigeria’s biggest reforms in decades to tackle issues including its high debt burden.

ALSO READ: Nigeria’s naira hits record low on black market ahead of central bank meeting

Labour unions have criticised the government’s ending of the fuel subsidy without measures to mitigate rising prices. Inflation, which has been in double-digits since 2016, climbed further to 22.79% in June.

Nigeria’s main labour unions and the government in June set an eight-week timeline to finalise an agreement to raise the minimum wage for government workers.

Nigeria, Africa’s largest oil producer, imports almost all its refined fuel due to inadequate refining capacity and neglect of existing refineries.

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