The Minister of Finance, Budget and National Planning, Zainab Ahmed, has explained why the Federal Government will do away with petroleum subsidy by June 2023.
Ahmed said this on Tuesday, November 15, in Abuja during a press conference to mark the end of the 28th National Economic Summit.
The News Agency of Nigeria reports that fuel subsidy gulped N2.565trillion between January and August 2022.
Also, in the Medium-Term Expenditure Framework, the Federal Government proposed to spend N3.3trillion on fuel subsidy between January and June 2023.
According to her, “First, we have to engage. We have already engaged with the states and the public before it was approved as part of the medium-term plan.
We have to do it by systematically informing the citizens about the size and the quantum of the fuel subsidy. We also have to educate them about the opportunity cost of what we are unable to do because of the fuel subsidy.
It is not money that we have; it is money that we have to borrow to maintain the fuel subsidy. Some countries introduced subsidy during the COVID-19, and because of the Russia-Ukraine conflict, but they are using their money to fund such subsidy.
In our case, we are borrowing to pay the subsidy; that is double jeopardy. It is something that has to stop. We are glad that majority of people in decision-making positions, including the political parties, have agreed that subsidy is not sustainable.
The plan is, by June 2023, we must have completely exited subsidy, and it has to be a gradual process.”