President Muhammadu Buhari has ruled out the possibility of heeding to calls by the International Monetary Fund (IMF), World Bank and other leading economists to remove fuel subsidy. The President said this in an interview made available to newsmen by his media office in Abuja.
With fresh fuel scarcity biting across the country, Buhari said that though his administration had planned to remove fuel subsidy last year, further consultation with stakeholders, as well as events, which unfolded this year, made the move increasingly untenable. Defending his government’s retention of fuel subsidy against the advice of experts, Buhari said most western countries are today implementing fuel subsidies.
Further speaking with newsmen Buhari said that the step up in domestic production in fuel, enabled by Petroleum Industry Act (PIA) and food (agricultural policies) is a move toward unification of the economy.
Recall that earlier this year, the National Assembly had granted the President’s proposal to set aside N4 trillion for a fuel subsidy in 2022.
Fueled by the rising price of crude oil on the global market and the depreciating value of the naira, Nigeria’s fuel subsidy payments have increased over time by approximately 349.42%, from N350 billion in 2019 to N1.573 trillion in 2021.
The cost of subsidizing the product was estimated to be N450 billion in 2020.
According to data from the Nigerian National Petroleum Corporation, NNPC, the entire cost of subsidies during January and February of 2022 was estimated to be N396.72 billion.
The federal government spent $1.2 trillion between 2006 and 2019.