Nigeria’s Minister of Finance, Zainab Ahmed, said Tuesday that it would be more appropriate for the government to start implementing the fuel subsidy policy in the second quarter of the year.
Mrs Ahmed disclosed this while speaking during an interview with Arise TV at the World Economic Forum (WEF) in Davos, Switzerland on Tuesday.
The minister noted that the country should exit the fuel subsidy regime as it is a significant contributing factor to the loss of revenue.
“You can see it in two ways, the payment made is a profit that will come to the government but not because it is bought for fuel subsidy.
“Also, if there is not enough revenue to buy refined oil products, we have to borrow to buy these products, so, if we take, more than N3 trillion, it is a significant relief if we do not get more than the amount forecasted for 2023 ,” he said.
Responding to why the petroleum subsidy was not removed in July last year as previously planned, he said as a collective decision, the government decided to extend the date as a result of the impact of the Covid-19 pandemic and rising inflation. country.
Mrs Ahmed added that the removal of fuel subsidy at the time would increase the burden on Nigerians and the president did not want it.
“Betrayed? No, this is a collective decision, recognizing the fact that due to the ongoing impact of the COVID-19 pandemic, as well as higher inflation, the removal of the first subsidy at that time will add another burden. citizen.
“The president does not want to think about the situation that will burden the citizens. So, the decision is extended from June 2022 to 18 months, starting from January 2022,” he said.
“By June 2023, we should be able to come out. The good thing is that we are hearing a consistent message that everyone is saying that this thing needs to be done because it is not serving the majority of Nigerians. Also, some of the new candidates who will be running for the 2023 elections are also saying that the regime the subsidy should end.
“What is safer is that the government now starts removing the fuel subsidy at the beginning of the second quarter because it is more beneficial if you remove it gradually than to wait and move it all at once.”
He explained that the idea in the 2023 budget is that the cost of fuel subsidy should not exceed N3.36 trillion, adding that “whether it is done 100 percent by June or else, the process and the cost are important.”
Fuel subsidy
The Nigerian government has for decades subsidized fuel and fixed retail prices of petroleum products.
In November 2021, the federal government announced plans to remove the fuel subsidy and replace it with a monthly transport grant of N5,000 for poor Nigerians.
READ ALSO: Fuel: Buhari’s broken promises, failures and subsidy policies
But the government later suspended the plan after that Nigerian Labor Congress (NLC) and the Trade Union Congress (TUC) threatened to start mass protests.
At the time, Mrs Ahmed said the Nigerian government realized that the timing of the removal of the planned petrol subsidy was “problematic”, and would increase the suffering of Nigerians.
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