The Federal Government has shelved plans to remove fuel subsidy by June 2023.
This was indicated by the Minister of Finance, Ahmed Zainab, on Thursday, shortly after the National Economic Council meeting, chaired by Vice-President Yemi Osinbajo.
The Minister, earlier in the year, had said the Federal Government will remove the controversial petrol subsidy before the end of President Muhammadu Buhari’s tenure on May 29, 2023.
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She attributed the delay in removal of the subsidy, as provided for in the Petroleum Industry Act (PIA) 2021, to the 2023 general election and the forthcoming national population census.
However, the federal government disclosed that no conclusion had been reached on how to mitigate the effect of the proposed fuel subsidy removal on the citizens.
Ahmed added that the subsidy removal was a difficult political and economic decision for the government to take.
“Almost everyone had now agreed that the subsidy was not serving the people it was supposed to serve and its high cost was adding to the government’s deficit,” Ahmed said.
“The subsidy cost per litre of petrol ranged between N350 to N400, maintaining that Nigeria spends about N250 billion monthly on subsidy.”
Speaking to the press after the NEC meeting on Thursday, Ahmed said the “council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable”.
She said the subsidy removal has to be done in such a way that the impact, as much as possible, “is mitigated on the lives of ordinary Nigerians”.
The PIA signed into law on August 16, 2021 by Buhari provides for total deregulation of the downstream sector, which implies the removal of subsidy and enthronement of a free market regime for the sector.
