Minister of Finance, Budget and National Planning Zainab Ahmed has said that the Federal Government of Nigeria will finally remove fuel subsidy by June 2022. The World Bank had condemned the continuous heavy expenditure by Nigerian government on petrol subsidy which affects spending in other critical sectors.
Speaking at a panel session during the ongoing 27th National Economic Summit, the minister said that the federal government had made provision for petrol subsidy till the end of the year.
She sai: “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 oil and gas industry.’’
The second half of 2022 is when the government expect the Dangote refinery to come on stream. The implication is that at the second half of 2022, Nigerians should expect an increase in pump price of petrol.
Also speaking during the panel session at the summit, the World Bank Country Director for Nigeria, Shubham Chaudhuri, who frowned on the huge expenditure on petrol subsidy, which will likely gulp N2.9 trillion this year, said Nigetia could channel the money being spent on subsidy to primary healthcare, basic education and rural roads. Chaudhuri, who likened Nigeria to a malnourished individual needing urgent treatment, pointed out that some critical decisions need to be made immediately for the country to realise its potential.
In his words: “This year, Nigeria is on track to spend N2.9tn on PMS subsidy, which is more than it spends on health. I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA (Petroleum Industry Act) coming into effect, this will go away. But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tn to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”
Speaking in the same vein, the Chairman, Presidential Economic Advisory Council, Prof. Doyin Salami, said subsidy really needed to go.
He declared: “My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.’’