The Federal Government will implement the removal of subsidy on Premium Motor Spirit (PMS) otherwise called petrol or fuel before May 29, 2023, which is the end of the administration of President Muhammadu Buhari, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said Voice of Nigeria (VON) quoted the minister as having said such during a courtesy visit to the headquarters of the organisation in Abuja on Tuesday. She also said the Federal Government delayed the implementation of the subsidy removal because of the general election and the forthcoming National Census.
She said, “The fuel subsidy is one of those political economic decisions that you don’t want to have but you’re stuck with it anyway. But we’ve come to the point when almost everybody has agreed that this is really not serving the people that it is supposed to service and the cost of it has become so high that it’s adding to our deficit. And right now, we have approval within the appropriate shouldn’t act to exit subsidy by June 2023. Or at least I can say the Appropriation Act made a provision that only allows subsidies up to June 2023.
So, we have to find ways in which we have to remove the subsidy and allow the market to flourish. When you remove the subsidy, then you have marketers that would be able to invest and bring this fuel product and sell it at market prices right now. And NNPC is the sole importer, it is imported and it is limited to an official price.
So the subsidy per letter now ranges, anything from 350, sometimes up to 400 per litre, the subsidy that the government is carrying just imagine what you can do with N250 billion per month because that’s the average cost per month to the nation that is even the cost to NNPC, there’s an implicit subsidy of foreign exchange (FX).
“Now, we have not even calculated or included in this N250 billion, there’s so much you can do. You can build more hospitals, more schools, provide more social services, and improve infrastructure that will enhance the quality of life of the people. Instead of just using it on a consumption item, you put gas in your car and in a couple of days it is gone and then you have to put it back in again. So we do hope that this time around, the whole country will work with the government to get rid of this subsidy to save us from continuously expending limited resources on a consumption item.” The minister also said Buhari was not happy with the sufferings and disruption of businesses and other economic activities as a result of the FG’s naira redesign implementation. She stated that the policy was not designed to inflict hardship on the people, adding that the government did not envisage that the policy would be harsh on Nigerians, adding that the government was working to resolve the challenges. The minister urged the incoming administration to increase the Value Added Tax (VAT) to 10%, as according to her, this will stimulate growth. She claimed that Nigeria has the lowest VAT rate in the world, and not even in Africa.
