FG Sets Date For End Of Fuel Subsidy

Minister of Finance, Budget and National Planning, Zainab Ahmed says the Federal Government will put an end to the provision of fuel subsidy by the end of June 2022.

Gatekeepers News reports that Ahmed said this on Monday while speaking at a session during the 27th National Economic Summit.

“In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry,” she said.

World Bank, in its input, decried the continued spending by the Nigerian government on petrol subsidy, which it said is on track to gobble up N2.9tn this year.

The Country Director for Nigeria, Shubham Chaudhuri, who spoke also spoke at the panel said the country could channel the money being spent on subsidies to primary healthcare, basic education and rural roads.

“This year, Nigeria is on track to spend N2.9tn on PMS subsidy, which is more than it spends on health,” he said.

Chaudhuri, who likened Nigeria to a malnourished individual needing urgent treatment, said some critical decisions need to be made now for the country to realise its potential.

He added that, “I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA(Petroleum Industry Act) coming into effect, this will go away.

“But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tn to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”

The Chairman, Presidential Economic Advisory Council, Prof. Doyin Salami, said he had argued for a long time that subsidy really needed to go.

He said, “With the PIA essentially it makes illegal petrol subsidy and yes, there is a period where NNPC and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is provision.

“My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”