The Minister of Finance, Budget and National Planning, Zainab Ahmed, says the Federal Government will do away with petroleum subsidy by June 2023.

Ahmed said this on Tuesday in Abuja during a press conference to mark the end of the 28th National Economic Summit.

The News Agency of Nigeria reports that fuel subsidy gulped N2.565tn between January and August 2022.

Also, in the Medium-Term Expenditure Framework, the Federal Government proposed to spend N3.3tn on fuel subsidy between January and June 2023.

According to Ahmed, removal of fuel subsidy is part of the FG’s medium-term plan in the budget.

She, however, said that the challenge was how to go about removing the subsidy.

“First, we have to engage. We have already engaged with the states and the public before it was approved as part of the medium-term plan.

“We have to do it by systematically informing the citizens about the size and the quantum of the fuel subsidy.

According to the minister, the fuel subsidy, in addition to budget deficit, is putting enormous pressure on the “fiscals”.

“It is not money that we have; it is money that we have to borrow to maintain the fuel subsidy.

“Some countries introduced subsidy during the COVID-19, and because of the Russia-Ukraine conflict, but they are using their money to fund such subsidy.

“In our case, we are borrowing to pay the subsidy; that is double jeopardy. It is something that has to stop

“We are glad that majority of people in decision-making positions, including the political parties, have agreed that subsidy is not sustainable.

”The plan is, by June 2023, we must have completely exited subsidy, and it has to be a gradual process,” she said.

Subsidy gulps N150 billion every month.” N150 billion is still less than the N200 billion monthly transport bonus bill the regime will pay to 400 million Nigerians. In other words, Nigeria will spend more money on transport bonus to an amorphous, unidentifiable, and probably cooked-up 40 million poor Nigerians than the subsidies it says it pays on petroleum subsidies, which it says are too expensive to be sustainable. That makes absolutely no sense.

The last time the Buhari regime increased fuel prices last year, it said it had completely done away with fuel subsidies and had left the price of petrol to the vagaries of demand and supply. Now, the regime’s honchos say again that the subsidy they said they’d completely removed, for which there was no allocation in the 2021 budget, must be removed again! ....."

Why are oil subsidies bad economics?

Every year, the Nigerian government runs huge budget deficits that could have been avoided if money budgeted for oil subsidies was allocated to other critical projects.

Subsidies should be used to spur investment in activities that raise the productive capacities of an economy (such as education, health, entrepreneurship, and infrastructure). They should be targeted at strategic sectors of the economy. They should not be used to finance non-durable consumption items like petrol.

Oil subsidies are inequitable, as they transfer the national wealth to those who own several cars and add little or no value to the national economy.

In lieu of subsidies, the government should invest massively in public transportation and boost the transport allowances of public-sector workers.

Removing fuel subsidies would also be good for the environment and safety on Nigerian roads. When motorists pay the full economic price for petrol, they will drive less, emit less pollution and reduce the incidence of road accidents.

There should be a clear communication to Nigerians that the removal of fuel subsidies favours the poor, and eliminates one of the several perks that the Nigerian elites undeservedly enjoy

Afonjacrusder:


The Iragbiji criminal druggie and old sick junkie is a dictator who hates the truth, and is always out to bully and intimate truth sayers with his hard drugs money. Yorubas please vote wisely! Nobody will be there to help us when we start weeping.

Greattha:
See sense.

You condemned it before gaining power. Said it was a fraud...that it didn't even exist. Made countless "empty promises " of one working refinery per year.

You got in, found how easy it was to make the needed hard decision but cowered....then even made it worse.

All of a sudden you've become brave when you won't suffer any fallout....on your way out.

General���

ZombieSlayer1:
Which other subsidy they talking about? Fuel is currently 260 a litre so what are these devils ranting about??