FG insists on stopping subsidizing gasoline by June 2023


The federal government has maintained that it would stop subsidizing gasoline by June 2023.

This was announced on Tuesday by the Minister of Finance, Budget and National Planning, Zainab Ahmed, during a press conference on the occasion of the closing of the 28th National Economic Summit (NES) in Abuja.

Ahmed said that the removal of the fuel subsidy is part of the federal government’s medium-term plan in the budget. He pointed out that the challenge is how to eliminate the subsidy.

  • Involve stakeholders: Ahmad said: “First, we have to commit. 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 citizens about the size and amount of the fuel subsidy. We also have to educate them about the opportunity cost of what we can’t do because of the fuel subsidy.”

The minister acknowledged that the fuel subsidy, in addition to the budget deficit, is exerting enormous pressure on “fiscals.”

  • She said, “It is not money that we have; it’s money we have to borrow to maintain the fuel subsidy. Some countries introduced subsidies during COVID-19 and due to the conflict between Russia and Ukraine, they are using their money to finance these subsidies.
  • “In our case, we are getting into debt to pay the subsidies; that’s double jeopardy. It’s something that has to stop. We are glad that most decision-makers, including political parties, have agreed that the subsidy is not sustainable.
  • “The plan is that by June 2023, we should be completely out of the subsidy regime, and it has to be a gradual process.”

The big problem: The fuel subsidy, which is a very thorny issue, has been a recurring and controversial public policy in Nigeria for some decades and the current fiscal impact clearly shows that the policy is unsustainable.

President Muhammadu Buhari, during the presentation of the proposed 20.51 trillion naira budget for 2023 to the National Assembly in early October, stated that the gasoline subsidy, which is a huge burden on the country’s resources, will end in 2023.

The Nigerian National Petroleum Company (NNPC) Limited previously said it spent N2.565 billion on gasoline subsidy payments between January and August 2022.

The federal government had projected to spend N4 trillion on gasoline subsidies in 2022 and another estimated N6.7 trillion in 2023 if the subsidy is not removed.

… FG insists on stopping the gasoline subsidy by June 2023 Read more on … Naijaonpoint.




Please enter your comment!
Please enter your name here