President Tinubu Justifies Fuel Price Hike as Necessary for Infrastructure Investment

President Bola Ahmed Tinubu has defended the recent fuel price hike, stating that it was necessary to free up funds for critical infrastructure projects such as road construction. Vice President Kasim Shettima conveyed Tinubu’s message during a speech at the 17th Annual Banking and Finance Conference organized by the Chartered Institute of Bankers in Abuja on Tuesday.

In a statement released by Shettima’s spokesperson, Stanley Nkwocha, Tinubu emphasized that the removal of fuel subsidies and other economic reforms were aimed at freeing up budgetary resources for infrastructure and social services.

“Though painful in the short term, the removal of fuel subsidies is designed to free up budgetary resources for critical investments in infrastructure and social services, frequent adjustment of the monetary policy rate, a move aimed at curbing inflation and fostering a more market-oriented exchange rate system,” Tinubu said.

He also highlighted that the country’s frequent interest rate adjustments, which have kept the rate at 26.75 percent, were intended to curb inflation and promote a more market-driven exchange rate system.

In his address, Tinubu called for collaboration between the public and private sectors and civil society organizations to support sustained economic growth. “To achieve sustained economic growth, we must intentionally align our policies and actions with the changing global landscape. The government is committed to implementing reforms to enhance macroeconomic stability, reduce inflation, and support infrastructure development,” he added.

The speech comes amid widespread discontent among Nigerians over the recent surge in fuel prices, which jumped from N617 to N720 per litre at Nigerian National Petroleum Company Limited retail outlets and N897 per litre at other filling stations.

The government had previously removed fuel subsidies in June of last year, leading to an increase in petrol prices from N238 to nearly N500 per litre. As a result, inflation in the country rose from 24.08 percent at the same time last year to 33.40 percent in July 2024.