How We Plan To Cushion Effect of Removal Of Fuel Subsidy- FG

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CBN

 

FG To Pay Nigerians Transport Allowance After Fuel Subsidy Removal - Zainab  Ahmed - 9jaflaver

… N5,000 Transport Grant For 40million Nigerians

 

Olusola Bello

 

 

The Federal Government has enumerated the steps it is going to take to cushion the effect of removing petrol subsidy when it eventually decides to carry out the exercise mid 2022.

 

According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the Federal Government will replace fuel subsidy with a N5,000 monthly transportation grant to the poorest Nigerians in 2022.

 

She said this at the launching of the World Bank Nigeria Development Update (NDU) on Tuesday. She said about 30 to 40 million most vulnerable Nigerians will benefit from the scheme.

 

The minister however stated that the final number of beneficiaries will depend on the resources available after the removal of the fuel subsidy.

She said: “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 to 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 four public refineries in the country, and the completion and coming on stream of the three private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts.”

Ahmed said though the set date for the subsidy removal is June 2022, the federal government hopes to do this before June in line with the Petroleum Industry Act (PIA).

 

“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.”

 

The World Bank in the development update had said the poorest 40% in Nigeria consume less than 3% of the total PMS in the country, highlighting that the rich were benefiting more from the subsidies.

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