Reasons Nigeria has not removed fuel subsidy −Presidency

*Nigerian President Muhammadu Buhari discloses the aftereffects of removing subsidy on petroleum products would have been too harsh for the Nigerian consumers to bear

Isola Moses | ConsumerConnect

President Muhammadu Buhari has stated the major factors why the Federal Government has not stopped paying subsidy on petroleum products in the West African country.

Buhari, in an interview with Bloomberg, said that the telling effects of removing fuel subsidy would have been too harsh on the Nigerian consumers.

The government is working on boosting local capacity in order to stem the inflationary pressures that are likely to be triggered by a removal of subsidies.

President Muhammadu Buhari

He said: “Most Western countries are today implementing fuel subsidies. Why would we remove ours now?” What is good for the goose is good for the gander!”

The Nigerian leader also noted: “What our Western allies are learning the hard way is what looks good on paper and the human consequences are two different things.

“My government set in motion plans to remove the subsidy late last year. After further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable.”

Buhari further stated: “Boosting internal production for refined products shall also help. Capacity is due to step up markedly later this year and next, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) come on board.

“The exchange rate is still susceptible to external shocks that can suddenly and severely affect Nigerian citizens. As we step up domestic production – both in fuel (enabled by PIA) and food (agricultural policies) – the inflationary threat shall diminish, and we can move toward unification.”

The President’s comment comes as several parts of the country, including commercial nerve centre Lagos, battle an acute shortage of fuel due to high price variations at especially private depots and transportation costs factors as stated by the Independent Petroleum Marketers Association of Nigeria (IPMAN).

ConsumerConnect had reported that IPMAN recently appealed to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to pay its members their bridging claims of about N500billion.

Alhaji Bashir Danmalam, Kano State Chairman of IPMAN, early May 2022, at a press conference in Kano, urged the Federal Government to prevail on the regulatory agency to pay the debt.

Bridging claims is the cost of hauling petroleum products from refineries and depots to fuel stations across the country.