Recall that, during the former President Goodluck Ebele Jonathan administration the issue of fuel subsidy was raised which later ended in the partial removal of the subsidy.
Now, the federal government has announced that it intends to suspend the payment of the fuel subsidy by the second half of 2022.
Indeed, the World Bank has condemned the federal government's continued high spending on oil subsidies, which is affecting spending in other critical sectors.
This was announced by the Minister of Finance, Budget, and National Planning, Zainab Ahmed, during the ongoing 27th National Economic Summit, on Monday, October 25,
Ahmed said: “In our 2022 budget we only included money for fuel subsidy for the first half of the year; In the second half of the year, we expect full deregulation of the sector to save foreign currency and potentially earn more from the oil and gas industry.
World Bank country director for Nigeria Shubham Chaudhuri, who previously spoke about the huge spending on oil subsidies, that is likely to swallow up N $ 2.9 trillion this year, also said at the summit's panel session that the country could channel the money from these subsidies to primary health care, basic education, and road construction projects.
Chaudhuri, who compared Nigeria to an undernourished person in need of urgent treatment, stressed that some important decisions must be made immediately in order for the country to reach its full potential.
He said, “This year, Nigeria is well on its way to spending 2.9 billion naira on PMS subsidy alone, which is more than it is spending on health. I think the urgency to do something now as time is running out to keep young Nigerians hoping for the future and potential of Nigeria. The kind of things that could be done right now - the gasoline subsidy; yes, I heard that in six months, maybe when the PIA (Petroleum Industry Act) goes into effect, it will go away.
“But the point is, can Nigeria even afford to wait those six months? And there is a choice: the N3tn subsidy for PMS, which deprives states of substantial income for investments in basic services.
In addition, the chairman of the President's Economic Advisory Council, Professor Doyin Salami, has long argued that subsidies really needed to be abolished.
He said, “My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.’’
Recall that NNPC Group's executive director Mele Kyari previously said that the federal government will provide an oil subsidy as part of its spending in the 2022 budget, due to gray areas and tensions between the federal government and the unions in implementing the full Deregulation of the downstream sector of the petroleum industry.
The federal government had suspended the implementation of the deregulation of the downstream sector of the oil industry, which would have led to an earlier cancellation of the oil subsidies, in order to enable extensive consultation with interest groups and trade unions.
well, we seems like we have not seen the end of Buhari's hard government yet. things are about to get really hard for all Nigerians.