SUSPENSION OF FUEL SUBSIDY REMOVAL ONLY A TEMPORARY MEASURE, SAYS NIGERIAN GOVERNMENT

The Nigerian government has postponed the removal of fuel subsidy, according to Zainab Ahmed, the country’s minister of finance, budget, and national planning. The National Economic Council had decided that the fuel subsidy should not be removed as originally anticipated for June 2023, and all necessary preparatory works should continue in consultation with the states and other key stakeholders.

“Council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore, but we have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians,” Ahmed said.

The inclusion of fuel subsidies in the national budget has been a contentious issue, with some arguing that the removal would not bode well with the masses. The Nigerian National Petroleum Company Limited noted that fuel subsidies as of February 2023 cost an estimated N400 billion monthly, a massive sum that can be allocated to other areas of development.

While the removal of subsidies may stabilize the economy in its own way, the counterargument is that it would increase the cost of living, owing to the fact that energy prices would skyrocket. Nigeria is already dealing with a 22.04% inflation rate, and the postponement of the implementation of the policy was attributed to bad timing due to heightened inflation.

The finance minister cited the need to roll out new and current refineries, lower the volume of goods being imported into the nation, and conduct further stakeholder discussions as reasons why the removal of fuel subsidy was suspended.

In a twist however, the minister clarified that the government was not suspending fuel subsidy removal indefinitely, but simply expanding the existing subsidy removal committee to include the transition committee members of President-elect Bola Ahmed Tinubu and the state governors.