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Oil Crash Spurs Nigeria to End Fuel Subsidies, Risk Backlash

  • Measure may rouse opposition if there is a rise in oil prices
  • Local supply hopes pinned on refinery Dangote is building
Offshore Oil Production In Nigeria's Agbami Deepwater Oilfield

Photographer: George Osodi/Bloomberg

Updated on

Nigeria has used the collapse in oil prices to usher in a policy the state has been trying to implement for more than two decades: scrap fuel subsidies.

The decision will save President Muhammadu Buhari’s government at least $2 billion a year, at a time when Africa’s biggest crude producer needs funds to deal with the coronavirus pandemic. It’s also a politically fraught move -- a rebound in oil prices could rouse the opposition and test the regime’s resilience. Previous attempts to wean Nigerians off cheap gasoline have led to major anti-government protests.