The Nigerian Government has revealed that the full removal of the subsidy payment on Premium Motor Spirit (PMS) also known as petrol, was delayed because of the 2023 general election and the forthcoming population and housing census.
Mrs. Zainab Ahmed, Nigerian Minister of Finance, Budget and National Planning, made this revelation during a courtesy visit to Voice of Nigeria (VON) headquarters in Abuja on Tuesday.
According to the Finance Minister, implementation of the policy had been delayed because of the general election and the forthcoming national census.
Ahmed noted that the outgoing Nigerian President, Muhammad Buhari will implement oil subsidy removal before the end of his administration on May 29, 2023.
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 masses that it is supposed to service.
“The cost of subsidy has become so high that it is adding to our deficit. And right now, 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.
“The NNPC is the sole importer, it is imported, and it is limited to an official price. So, the subsidy per litre now ranges from 350 – sometimes up to 400 per liter.
“You can just imagine what we would have achieved with N250 billion spent on subsidizing petrol per month. This is just the average cost per month to the nation. This is a huge cost even to Nigerian National Petroleum Company Limited, which also bears the implicit subsidy of foreign exchange.
“There is so much that could have been achieved with the huge allocation. We could have built more hospitals, schools, and provided more social services, and improved infrastructure that will enhance the quality of life of average Nigerians instead of just using such amounts to service consumption commodity.
“We are indeed hopeful that the whole country will cooperate with the government this time round, to get rid of the subsidy and save the country from continuously channeling limited revenue on a consumption item,” the finance minister said.