The Federal Government on Tuesday said that arrangements were ongoing to ensure that fuel subsidy, which has been one of the challenges of public finance efficiency in Nigeria over the years is removed with a view to committing savings on it to critical areas that will improve the socio-economic wellbeing of ordinary Nigerians, especially the very poor citizens in the country.

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed gave this hint during the panel discussions on the launch of the World Bank Nigeria Development Update (NDU) in Abuja.

Zainab, who spoke on the one-year implementation timeline set in the Petroleum Industry Act (PIA) 2021, to justify the government’s planned subsidy removal, said that though June 2022 was set for the fiscal measure but that ongoing discussions with the stakeholders in the downstream sector showed that the fiscal measure could be successful adopted in February with the planned socio-economic interventions by the government to mitigate the shock on ordinary Nigerians.

 According to her, the removal of the fuel subsidy by 2022 would be mititgated by some fiscal measures such as N5000-a-month conditional cash transfer to the poorest Nigerians.

The minister explained that the CCT which now covers about 20 million poorest Nigerians would be expanded to cover between 30 to 40 million Nigerians that make up the poorest population of the country, adding that the final number of beneficiaries would depend on the resources available after the removal of the fuel subsidy.

She clarified: “The subsidies regime in the [oil] sector remains unsustainable and economically disingenuous. Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population.

“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.

 “We are very optimistic that the recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021, hopefully, the full reactivation of the 4 public refineries in the country, and the completion and coming on stream of the 3 private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts.”

“I agree with the Report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilizing cash transfers to safeguard the welfare of poor and middle-class households”, Zainab assured.