- Minister of Finance stated that FG plans to remove subsidies on petrol in phases.
- FG has removed all subsidies in the power sector.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the Federal Government (FG) has withdrawn all subsidies in the power sector, with a plan to end subsidies on petrol gradually. In a report by the Vanguard, Ahmed made this known in a virtual meeting of the International Monetary Fund. At the meeting, she said that the rising price of crude oil has increased the petrol subsidy burden on the Federal Government.
She noted that though the government had a setback in its plan to have subsidies on petrol removed by July this year, it would work with the National Assembly to have it removed in phases. “We are cleaning up our subsidies. We had a setback, we were to remove the fuel subsidy by July this year, but there was a lot of push back from the polity. We have elections coming, and also because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.”
“But we have been able to implement subsidy removal in the electricity sector quietly, and as it is, as we speak, we don’t have subsidies in the electricity sector. Over time, we did that by carefully adjusting the prices at some levels while holding the lower levels down. Fuel subsidy is a huge problem for us. It has thrown up our deficits too much higher than we planned. What is happening now with the global oil prices is also going to worsen matters, but the current review that we are doing is to hold the subsidy at the level in which we planned.”
“We are currently doing a budget amendment to accommodate incremental subsidy (removal) due to the reversal of the decision, and we want to cap it at that. Hopefully, the parliament will agree with us, and we can continue with our plan for subsidy (removal); otherwise, the way things are going, we will not be able to predict where we will be,” Zainab stated.