The Minister of Finance, Budgets and National Planning, Mrs. Zainab Ahmed, said that the Federal Government, FG, has quietly removed all subsidies in the power sector, with a plan to gradually end subsidies on petrol.
Ahmed who spoke at a virtual meeting of the International Monetary Fund (IMF) with the theme: “The Political Economy of Fiscal Reforms in Africa”, said the current high price of crude oil has further increased petrol subsidy burden on the Federal Government.
She noted that though the government had a setback in its plan to have subsidies on petrol removed by July this year, it would work with the National Assembly to have it removed in phases.
She stated: “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”.