We'll Quietly Remove Fuel Subsidy, We're Delaying It Because of 2023 Elections – Minister

Alt: Zainab Ahmed"

The Minister of Finance, Mrs Zainab Ahmed, has revealed how the Federal Government will quietly remove subsidy on premium motor spirit (PMS), otherwise known as petrol. She said the government will apply same strategy of which subsidy was removed on electricity tariff.

The Minister said this while speaking at the virtual meeting of African Finance Ministers and the International Monetary Fund on Thursday, with the theme  “The political economy of fiscal reforms.”

According to her, the government had to carefully adjust the electricity tariff prices incrementally at some levels until it was totally removed.

Mrs Ahmed also said the onging amendment of the budget was to accommodate the incremental removal of fuel subsidy.

She explained that why the government can’t just remove it totally now because “we have elections coming” and the impacts of COVID-19. 

“We are cleaning up our subsidies. We had a setback; we were to remove fuel subsidy by July this year but there was a lot of pushback from the polity. We have elections coming and 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 quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector. We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down,” the Minister said.

She maintained that fuel subsidy remained a problem for the government as it had created more deficits than what was planned. She noted that the rise in global oil prices would lead to more rise in subsidy bill “but the current review that we are doing is to hold the subsidy at the level in which it is planned,” she said

“We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that. Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where the deficit will be as a result of the fluctuation in the global market.”

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