(Bloomberg) -- Nigeria’s state oil company almost tripled the pump price of gasoline after President Bola Tinubu said he’ll fulfill a pledge to scrap fuel subsidies that cost the government $10 billion last year.

The Nigerian National Petroleum Co. on Wednesday raised the cost to 488 naira ($1.05) a liter from 184 naira in Lagos, Nigeria’s commercial hub, according to a document seen by Bloomberg and confirmed by the company. In Abuja, the nation’s capital, prices will jump to 537 naira from 194 naira, it said.

Tinubu announced the end of the decades-long subsidy regime in his inauguration speech on May 29. Many filling stations across the country stopped selling fuel after the announcement to adjust their prices. Long queues have formed at outlets, while intra-city transport fares have increased.

The decision to abandon the policy triggered a rally in Nigerian dollar bonds on Tuesday. Africa’s largest crude producer would have had to spend 6 trillion naira ($12.9 billion) — about two-thirds of the revenue expected to be generated by oil and gas output — this year if the subsidies had continued. 

The surge in fuel prices may hamper the central bank’s effort to rein in inflation in Africa’s most-populous country, where about 40% of the population live in extreme poverty. The monetary policy committee has raised its benchmark interest rate by 700 basis points since May 2022 to a record 18.5%. Price-growth accelerated to a near 18-year high of 22.2% in April.

The NNPC, which currently imports all of Nigeria’s gasoline needs, has been selling the fuel at a steep loss. The firm’s Chief Executive Officer Mele Kyari said on Tuesday the government is yet to reimburse the company for more than $6 billion that it’s spent on keeping gasoline cheap.

“We can’t continue to build this,” he said.

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