The rising cost of crude oil will increase the cost of Nigeria’s gasoline subsidy by nearly ten times what it had originally budgeted, Nigeria’s President Muhammadu Buhari said in a recent letter to lawmakers. Nigeria’s Petroleum Motor Spirit subsidy is now set to cost 4 trillion naira this year, or $9.6 billion. This compares to Nigeria’s previous projections, which called for just 443 billion naira in gasoline subsidies. Even though Nigeria is a major producer of crude oil, the high price of crude oil has come with drawbacks for Africa’s largest crude oil producer. Nigeria swaps at least a portion of its crude oil for gasoline—which it then sells at a loss. Nigeria imports nearly all of the gasoline it consumes. And with today’s high prices, Nigeria is selling this gasoline at a very steep loss in order to keep gasoline prices at 162.5 naira per liter (39 cents). […]