The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has revealed that the Federal Government is planning to replace fuel subsidy with transport palliative.
Speaking on the Channels Television on Thursday, Mrs. Ahmed described fuel subsidy as a major waste and a drain on the Nigerian economy,saying the government plans to replace it with transport allowance to assuage the effect of its removal on the masses for a short period.
She said, “The Petroleum Industry Act that has been passed has a provision that says petroleum products should be deregulated, which means there should be no subsidy of any petroleum product. In making our plans, we assume that this deregulation would take effect from July 2022.
“It is important that we exit the subsidy. It is costing us a significant amount of resources that we could have applied for education, health and critical infrastructure. It is a major waste and drain on the economy.”
“Who is benefiting from this subsidy? It is the people with a number of cars that they run. It is not the person entering a bus from the village to the market. If you look at those large mass transit buses, they run on diesel and diesel is deregulated.
“If you look at trucks that carry goods from farm to market, they run on diesel. What the common man use for cooking is kerosene; that also is deregulated. So, why should we continue to keep the subsidy for a product that is only benefitting the people that can actually afford the market price?”
FG To Replace Fuel Subsidy With Transport Palliative
Ahmed said the federal government is considering the payment of transport allowance to Nigerians for six or 12 months to cushion the effect of fuel subsidy removal.
She said the transport allowance will be transferred directly to the bank accounts of the right people through the help of a bank verification number and national identity number.
The Minister said, “What we are doing now is — we’ve been negotiating with labour. We are planning and deploying CNG — which is an alternative to mass transit to PMS.”
“But we are also looking at providing some palliatives for a large number of the population in terms of maybe a transport subsidy for a short period like six months or if it is long, maybe nine months or maximum 12 months.
“Transport subsidy that would be given directly to individuals. What is constraining us is the issue of registration. The national identity registration process is ongoing and we want to make sure that this subsidy goes into the hands of the right people.
“That we can make transfers to people using their BVNs, account number and national identity number, and we know that it has gone to the right people.
“That is part of the things we are negotiating and working on. We are also engaging with the World Bank in designing a programme that will help us to provide succour for at least a minimum of 6 months, maximum of 12 months to enable us to make that transition.”
Asked when the fuel subsidy regime would end, she said, “If you look at what I said earlier, as from July 2022, there is no provision for fuel subsidy.
Asked if Nigerians should forget fuel subsidy in July 2022, she said, “Yes. We are trying to see if we can make it earlier. If we are able to get the funding to provide this alternative transport allowance, then we will be able to make it earlier.”
KanyiDaily recalls that Zainab Ahmed had recently claimed that the recent borrowings by the Federal Government were instrumental to the country’s exit from recessions.
