The Minister of Finance, Budget and National Planning, Zainab Ahmed has announced that by June 2023, Federal Government of Nigeria will put an end to petroleum subsidy.
According to Punch Newspaper, the Minister announced this in Abuja on Tuesday in a press conference to mark the end of the 28th National Economic Summit.
The News Agency of Nigeria has reported that fuel subsidy swallowed N2.565tn between January and August 2022.
Also, in the Medium-Term Expenditure Framework, the Federal Government proposed to spend N3.3tn on fuel subsidy between January and June 2023.
In the Minister’s statement, removing the fuel subsidy is among the Federal Government medium-term plan of the budget.
She said that the challenge is how to go about the subsidy removal.
We have already engaged with the states and the public before it was approved as part of the medium-term plan.
It has to be done systematically to inform the citizens about the size and the quantum of the fuel subsidy.
She said people have to be educated about the opportunity cost of what we are unable to do because of the fuel subsidy.
According to the minister, the fuel subsidy, in addition to the budget deficit, is putting very large pressure on the “budgetary”.
“We used to borrow money to maintain the fuel subsidy”.
“Some countries introduced subsidies during the COVID-19, and because of the Russia-Ukraine conflict, but they are using their money to fund such subsidy.
This has to stop, because in our own case in Nigeria, all we do is borrow money to pay the subsidy.
“We are glad that the majority of people in decision-making positions, including the political parties, have agreed that subsidy is not sustainable.
She said by June 2023, the plan is that we must have completely left subsidy and it has to be a gradual process.
