Federal Government begins gradual removal of fuel subsidy

Federal Government said it may begin a gradual removal of the petrol subsidy from April this year, about three months ahead of the initial plan to affect a complete stop to the expenditure head.

Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, who dropped this hint during an interview on national TV on the sidelines of the World Economic Forum in Davos, Switzerland, also said the subsidy removal appears to be the position of all contestants to the leadership of the country in their political campaigns for next month’s general elections.

After an eighteen month extension, the Federal Government plans to spend three point three five trillion naira on petrol subsidies from January till June this year.

The extension, however, has generated widespread debate on the expediency of such expenditure as it will increase the budget deficit of the Federal Government which would be financed through additional borrowing and hence further rise in the nation’s public debt which stood at forty four point zero six trillion naira as at end of September last year.

According to the World Bank and the International Monetary Fund, the removal of fuel subsidies is one of the fiscal reforms urgently needed to lift Nigeria’s development outcomes, which are severely constrained by the inefficient use of resources.