Explainer: Tinubu Attempts To Mitigate Effects Of The Fuel Subsidy Removal 

What Happened?

The House of Representatives approved a request proposed by President Tinubu to provide palliatives in order to mitigate the effects of the recent removal of fuel subsidies on Nigerians. For the past month, Nigerians have been suffering from the negative effects of the subsidy removal which has caused the prices of petrol to skyrocket from N195  to above N500 per liter across the country. The hike in the price of petrol has caused the cost of transportation to double, making it difficult for public commuters to comfortably afford it.  It has also forced car owners to spend between N25,000 to N60,000 to fill up their tanks biweekly, depending on the types of vehicles they use. Additionally, this has affected the prices of goods and services which have also seen an increase. 

President Tinubu requested N500 billion to be extracted from the 2022 supplementary budget of N819 billion to cushion these effects by disbursing funds directly to impoverished Nigerians. 

What is a Supplementary Budget?

A supplementary budget is an additional budget implemented when there is a need for extra spending beyond what was allocated in the original national budget at the beginning of a fiscal year. This happens when unforeseen circumstances such as economic conditions, emergencies, or the need for additional funds for specific purposes arise and need to be addressed. They are brought to the National Assembly as bills to be wrung through the normal legislative process before they are passed into law. 

Supplementary budgets are passed frequently in Nigeria to enable the government to respond to emergencies as they arise and provide flexibility in settling these emergencies. In December 2022, former President Buhari requested a supplementary budget to the sum of N819 to address the devastation caused by floods on farmlands and road infrastructure across the nation.  It has now been extended to tackle other concerns that have arisen in 2023. Prior to that, a supplementary budget of N895 was approved in 2021 to cover expenses for the COVID-19 vaccines and procurement of military equipment. 

Although supplementary budgets allow the government to mitigate dire situations, their effects can be marred by the propensity of Nigerian politicians to hoard resources provided to assist Nigerians. For example, during the Covid 19 pandemic, the Nigerian government provided palliative measures to Nigerians to support them through the lockdown, however many of those resources were hijacked and did not get to those who needed them the most. This distrust created by the officials of the Nigerian government has run deep within the populace hence the effectiveness of the supplementary budget is doubtable.

What’s Next?

According to the breakdown detailed on the bill, from the N819 billion supplementary budget, N500 billion will be used for fuel subsidy palliatives while N19.2 billion has been slated for the Ministry of Agriculture, N185.2 billion for the Ministry of Works, N100 billion for the  Ministry of Water Resources, N35 billion for the  National Judicial Council, N70 billion for National Assembly Infrastructure and N10 billion for the Federal Capital Territory Administration for critical projects.