Fuel Subsidy: FG Said We’ll Remove Subsidy on Petrol Just Like Electricity
Months after the Federal Government successfully and quietly removed subsidies on electricity tariffs, Minister of Finance, Budget and National Planning, Zainab Ahmed, said at a meeting of African Finance Ministers and the International Monetary Fund that fuel subsidy removal is next.
She also said that the removal of petrol subsidies was hindered back in 2020 by COVID and forthcoming elections.
“We are cleaning up our subsidies. We had a setback; we were to remove fuel subsidy by July this year but there was a lot of pushback from the polity. We have elections coming and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.
“But we have been able to quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector. We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down.”
Zainab Ahmed said that the petrol subsidy has become a huge problem for the Nigerian government, as the rise in global oil prices has worsened the issue over the years.
“The current review that we are doing is to hold the subsidy at the level in which it is planned… We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that.
“Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where the deficit will be as a result of the fluctuation in the global market.”
Back in October last year, Zainab Ahmed announced that the Nigerian federal government made provision for petrol subsidy only for the first six months of 2022, as the current administration looks towards complete deregulation of the sector in 2022.