Zainab Ahmed, minister of finance, budget and national planning, says the federal government may begin the gradual removal petrol subsidy from April 2023.
Ahmed spoke on Tuesday during an interview with ARISE TV on the sidelines of the World Economic Forum in Davos, Switzerland.
After an 18-month extension, the federal government plans to spend N3.35 trillion on petrol subsidy from January till June, 2023.
Speaking during the interview, the minister noted that the petrol subsidy regime must be exited as it is revenue that would have gone into the government coffers.
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“Where there is not enough revenue for government to buy the refined petroleum products, we have had to borrow to buy the petroleum products. So, if we take that out, that is about N3.25 trillion. That is a significant relief, that we do not incur any more than that number that we projected for in 2023,” she said.
Asked if she felt betrayed that the petrol subsidy had not been removed despite her best efforts to ensure removal, she stressed that it was a collective decision to retain the payments.
“Betrayed? No. It was a decision that was taken as a collective, recognising the fact that due to the lingering impact of the COVID-19 pandemic, and also heightened inflation, that removal of the fuel subsidy at that time, would have increased more burden on the citizen,” Ahmed said.
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She added that President Muhammadu Buhari does not want to take measures that exacerbate economic hardship in the country.
“The president does not want to contemplate a situation where measures are taken that are further going to burden the citizens. So, the decision was to extend the period from June 2022 (sic) to 18 months, beginning from January 2022,” the minister said.
“So, in June 2023, we should be able to exit. The good thing is, we hear a consistent message that everybody is saying this thing needs to go. It is not serving the majority of Nigerians.
“I listened to some of the new leaders that are campaigning for the next round of leadership in the country that are saying they will get rid of it very quickly.
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“What will be safer is for the current administration to maybe at the beginning of the second quarter to start removing the fuel subsidy, because it’s more expedient if you remove it gradually, than to wait and move it all in one big swoop.
“So, the idea for us in the budget, is that the subsidy costs should not exceed that N3.23 trillion. So, whether it’s done completely 100 percent by June or by July, or whatever, it’s a process.”
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