The Federal Government of Nigeria have completely removed electricity subsidy and plans on doing same to petrol but in phases. The new development was made known to the public by the Minister of Finance, Budgets and National Planning, Mrs. Zainab Ahmed during a virtual meeting of the International Monetary Fund (IMF) themed: “The Political Economy of Fiscal Reforms in Africa”.
She said that the FG has increased its petrol subsidy as a result of high costs of crude oil but subsidy will be redrawn quietly and in phases for the benefits of Nigerians.
The minister went further to say that the plan of the FG was to remove petrol subsidy having done so for that of electricity in recent months. However, she said that a meeting between the National Assembly and other involved agencies will be in place in order to deliberate on the matter and figure out a way it can be done in phases.
Zainab Ahmed was quoted saying:
“We are cleaning up our subsidies. We had a setback, we were to remove fuel subsidy by July this year but there was a lot of push back from the polity. We have elections coming and also because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.
“But we have been able to quietly implement subsidy removal in the electricity sector and as it is, as we speak, we don’t have subsidies in the electricity sector. We did that overtime by carefully adjusting the prices at some levels while holding the lower levels down.
“Fuel subsidy is a huge problem for us. It has thrown up our deficits too much higher than we planned. What is happening now with the global oil prices is also going to worsen matters but the current review that we are doing is to hold the subsidy at the level in which we planned.
“We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that. Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where we will be”.