Buhari Govt To Begin Removal Of Petrol Subsidy In April
The administration of President Muhammadu Buhari has declared that it will start gradually eliminating the gasoline subsidy in the second quarter of 2023.
In her report, Zainab Ahmed, the Minister of Finance, Budget, and National Planning, made this revelation, highlighting the World Economic Forum’s side events in Davos, Switzerland.
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This online newspaper is aware that the federal government’s original schedule called for the subsidy removal to start in June after an additional 18 months. Ahmed pointed out that the removal of the gasoline subsidy will now start in April 2023, starting about three months earlier than the original schedule for putting an end to the expenditure head.
She asserts that the elimination of subsidies appears to be the stance taken by every presidential candidate vying to succeed the current administration.
“What will be safer is for the current administration to start removing the fuel subsidy, maybe at the beginning of the second quarter, because it’s more expedient if you remove it gradually than to wait and move it all at once swoop,” she said.
For the period of January through June 2023, the government had budgeted N3.35 trillion for fuel subsidies; however, the development had sparked intense debate over the necessity of such an expenditure because it would increase the FG’s budget deficit, which would require additional borrowing, driving up the country’s public debt, which as of the end of September 2022 was N44.06 trillion.
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Removing fuel subsidies is one of the fiscal reforms that are urgently required, according to the World Bank and the International Monetary Fund (IMF), to improve Nigeria’s development outcomes, which are severely hampered by the inefficient use of resources.
World Bank President David Malpass stated earlier in his speech that Nigeria’s government urgently needed to improve fiscal management, establish a single, stable market-based exchange rate, eliminate its expensive, regressive fuel subsidy, and rationalize preferential trade restrictions and tax exemptions.
Malpass made this observation in a comment on a World Bank report titled “Nigeria Public Finance Review: Fiscal Adjustment for Better and Sustained Results,” which was released in November of last year.
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