We’re not bringing back fuel subsidy, FG insists

The Federal Government has insisted that it will go ahead with its policy on the removal of subsidy on Premium Motor Spirit (Petrol) and electricity, with no provision made in the 2021 budget for their subsidy.

Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this while answering a question on whether there would be a return to petrol subsidy following the reduction in petrol price about a month ago.

“We are not bringing back fuel subsidies. We didn’t make provision for fuel subsidy in the budget. The impact of what was done was reducing some of the cost components that were within the template. And also related to it, on matters of electricity subsidies, no provisions have been made for subsidy for fuel and no provisions have been made for subsidy for electricity.”

Also, while talking about the new Finance Act 2020, which took effect from 1 January 2021, Ahmed said the act adopts counter-cyclical fiscal policies in response to the Covid-19 pandemic by providing fiscal relief to taxpayers.

The Minister stated that the government would hold the unclaimed dividends of investors in the stock market in trust and would make the fund available when needed by an investor.

“On the issue of unclaimed dividends and government’s accounts and projections, there would be as much as N850bn to be realized in the special trust fund of unclaimed dividends. Government is keeping the money in trust for the beneficiaries. At any time, a registrar or a bank confirms that this is the true and bonafide beneficiary of this fund, then the government will release from that trust fund to the investor who has it.”

It can be recalled that the Federal Government, in early 2020, announced the full deregulation of the downstream sector of the oil industry which culminated in the removal of petrol subsidy.

The government said that following a sharp drop in revenue, it was becoming increasingly unsustainable for it to continue to subsidize the product with funds that can be used for the development of critical infrastructures in the country.