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Nigeria Minister of Finance, Budget and National PlanningZainab Ahmed said the government did not suspend plans to remove fuel subsidies, but instead expanded the subsidy removal committee to include teams from the incoming administration and state governors.
A statement issued by Ms. Ahmed’s Special Adviser on Media and Communications, Yunusa Abdullahi, made this known in a statement on Friday.
“In the context of the story in some media that the federal government has suspended the elimination of the gasoline subsidy, the government has said that it has not suspended the elimination, but rather has expanded the subsidy elimination committee to include equipment of the incoming administration and state governors,” the statement said.
According to the statement, the minister said the NEC deliberated extensively on the issue and came to the conclusion that the subsidy should be removed as it is not sustainable, but further consultation is necessary, especially the need to involve members of the incoming administration. and state government representatives.
She said: “We have agreed to form an expanded committee that will look at the process for the removal of the subsidy, including determining the exact timing and steps that need to be taken to provide support to the poor and vulnerable. ”
“There is also a need to agree on alternative measures that will be put in place to ensure that there is sufficient supply of petroleum products in the country,” Ms Ahmed said in the statement.
The statement comes against the backdrop of plans to suspend the removal of subsidies for petroleum products at the end of President Muhammadu Buhari’s administration.
According to the statement, the minister explained that the “Subsidy Removal Committee” currently consists of the Ministry of Finance, Budget and National Planning, the Ministry of Petroleum Resources, the Nigerian National Petroleum Company (NNPC) Limited, regulators downstream and upstream, the Central Bank of Nigeria (CBN) and the chief economic adviser to the president.
He noted that the Fiscal Framework and Appropriation Act of 2023, as well as the Petroleum Industry Act (PIA), have stipulated that the government must end fuel subsidies by June 2023.
He explained that the committee must develop a roadmap for the elimination of the subsidy.
“No change in the general direction of policy regarding the gasoline subsidy is anticipated for June 2023,” he said.
fuel subsidy
The Nigerian government has, for decades, subsidized fuel and set retail prices for petroleum products. However, the payment has threatened the nation’s fiscal position and affected the government’s ability to finance development projects across the country.
In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a N5,000 monthly transport subsidy for poor Nigerians.
READ ALSO: Federal government suspends elimination of subsidies
But the government later suspended the plan after the Nigerian Labor Congress (NLC) and Trades Union Congress (TUC) threatened to launch mass protests.
In February, the International Monetary Fund (IMF) urged the Nigerian government to honor its commitment to eliminate fuel subsidies by mid-2023.
The Washington-based lender in a report titled ‘IMF Executive Board Concludes 2022 Article IV Consultation with Nigeria’ urged authorities to honor their “commitment to increase well-targeted social spending.”
Despite rising oil prices, the IMF said, the government’s fiscal deficit is estimated to have widened further in 2022, mainly due to the high costs of fuel subsidies.