The Minister Finance, Zainab Ahmed has assured that the federal government has no immediate plans to stop fuel subsidy because there’s no alternative to the process at the moment.
According to a press statement issued by her Media Aide, the Minister argued that the oil subsidy arrangement is more sustainable for the country, unlike what obtained before now.
“NNPC is the sole importer of petroleum products, and so when they import it is the cost of business and they deduct that cost before they remit the little money to the federation account. So that is completely different. It is more cost effective, it is cheaper and what is being done now is easier to monitor what transpired.
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“We are not there yet and we discuss this periodically under the economic management team. But we have not found a formula that works for Nigeria and you know Nigeria is unique because what works in Ghana may not work in here.
“So, it is still work in progress and so there is no intention to remove fuel subsidy at this time.”
Recall that the issue of fuel subsidy has, for long, been a very delicate one in the Nigerian polity. While some people are against it, many Nigerians perceive it as the only substantial benefit they receive from the Nigerian Government.
Prior attempts by the Government to remove fuel subsidy was were met with resistance by the people. In January 2012 to be specific, Nigerians occupied Nigeria to protest yet another attempt to remove the subsidy.
Recently, the Managing Director of the International Monetary Fund (IMF) called on the Nigerian Government to remove fuel subsidy. According to Ms Legarde, doing this is important due to the low contribution of tax revenue to Gross Domestic Product (GDP).
The advice resulted in speculations about whether the subsidy would or not be removed. It is, therefore, a good thing that the Minister is putting an end to the rumours.