The Minister of Finance, Budget and National Planning, Zainab Ahmed, says the Federal Government will remove oil subsidy by June 2023.
Ahmed said this at a press conference at the closing of the 28th National Economic Summit in Abuja on Tuesday.
The News Agency of Nigeria reports that fuel subsidies for the period January to August 2022 gobbled up N2,565tn.
Also, in the Medium Term Expenditure Framework, the Federal Government proposed to spend N3.3tn on fuel subsidies between January and June 2023.
According to Ahmed, removing the fuel subsidy in the budget is part of the FG’s medium-term plan.
He, however, said that the challenge was how to remove the subsidy.
“First of all, we have to make a commitment. We have already talked to states and citizens before accepting it as part of the medium-term plan.
“We must do this by systematically informing citizens of the size and amount of the fuel subsidy.
“We also have to educate them about the opportunity cost of what we can’t do because of the fuel subsidy,” he said.
According to the Minister, fuel subsidies, in addition to the budget deficit, are putting enormous pressure on the “fiscals”.
“We don’t have money; it’s money we have to borrow to maintain the fuel subsidy.
“Some countries introduced subsidies during the time of COVID-19 and because of the Russia-Ukraine conflict, but they are using the money to finance this subsidy.
“In our case, we are going into debt to pay the subsidy; that’s double jeopardy. It is something that must be stopped
“We are glad that the majority in decision-making positions, including political parties, have agreed that subsidies are not sustainable.
“The plan is that by June 2023, we have to stop the subsidy completely, and it has to be a gradual process,” he said.