FG: Like electricity, we'll remove subsidy on petrol

The Federal Government says it has succeeded in quietly removing subsidy on electricity tariff.

Minister of Finance, Budget and National Planning, Zainab Ahmed, said this at a meeting of African Finance Ministers and the International Monetary Fund.

At the meeting, the minister said petrol subsidy was the next target.

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Ahmed added that the removal of petrol subsidy was hindered by COVID and forthcoming elections.

“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.”

Ahmed said petrol subsidy remained a huge problem for the government, adding that the rise in global oil prices would worsen the issue.

“The current review that we are doing is to hold the subsidy at the level in which it is planned… 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.”

In October, Ahmed had announced that the federal government made provision for petrol subsidy only for the first six months of 2022 as the government looked towards complete deregulation of the sector.

She had said: “In our 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oiland gas industry”.

This had created mixed reactions. However, Senate President Ahmad Lawan later said President Muhammadu Buhari never told anyone to remove subsidy.

The executive had put the plan on hold after that, semding a supplementary budget to the National Assembly.

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