2022 Budget amendment to reflect incremental fuel subsidy removal ─Minister

*Zainab Ahmed, Minister for Finance, Budget and National Planning, discloses the Federal Government is currently doing a budget amendment to accommodate incremental fuel subsidy removal following the recent reversal of the controversial decision

Gbenga Kayode | ConsumerConnect

Amid controversies over the announced utility price hikes at the time, the Federal Government has disclosed how it effortlessly removed subsidy on electricity tariffs for Nigerian consumers.

Mrs. Zainab Ahmed, Honourable Minister for Finance, Budget and National Planning, who noted this development said that the Federal Government had to carefully adjust the prices incrementally at some levels.

Speaking at a virtual meeting of African Finance Ministers and the International Monetary Fund (IMF) Thursday, March 10, 2022, Mrs. Ahmed also said the amendment of this year’s Federal Budget was ongoing to accommodate the incremental removal of fuel subsidy.

The theme of the meeting was: ‘The Political Economy of Fiscal Reforms’.

“We are cleaning up our subsidies.

“We had a setback; we were to remove fuel subsidy by July this year but there was a lot of pushback from the polity,” stated the Minister.

Mrs. Ahmed further said: “We have elections coming and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.

“But we have been able to quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector.

“We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down.”

Fuel subsidy, she noted, remained a huge problem for the government as it had thrown up deficits more than what was planned.

According to her, the rise in global oil prices will worsen the issue “but the current review that we are doing is to hold the subsidy at the level in which it is planned.”

The Minister for Finance further stated: “We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that.

“Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where the deficit will be as a result of the fluctuation in the global market.”

The government is improving tax administration and compliance by adopting technology in order to boost revenue, said Ahmed.

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