Nigeria’s Minister of Finance, Budget and National Planning, Zainab Ahmed, has revealed that the federal government wants to remove petrol subsidy before President Muhammadu Buhari’s tenure finishes on May 29, 2023.
While making the revelation, the Minister stated that the delay in the removal of the subsidy is due to the forthcoming national population census and the 2023 general election, as provided for in the Petroleum Industry Act (PIA) 2021. The PIA provides for complete deregulation of the downstream sector and a free market regime for the sector.
Meanwhile, no conclusion has been reached on how to cushion the effect of the proposed fuel subsidy removal on citizens. She urged the incoming administration to increase the Value Added Tax (VAT) from 7.5% to 10% to stimulate the country’s economic growth.
She said the removal of subsidy was a difficult political and economic decision, but it was not serving the people it was supposed to serve. The cost of subsidy per litre of petrol ranges from N350 to N400 and Nigeria spends about N250 billion monthly on subsidy.
Recently, the Federal Executive Council approved Nigeria Agenda 2050, which seeks to transform Nigeria into an “Upper-Middle Income Country” with significant improvements in per capita income.
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