“Council agreed that the first subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible mitigated on the lives of ordinary Nigerians," said Mrs Ahmed.
The government also plans to work with representatives of the state to plan the eventual removal of the fuel subsidy and how best to support those most affected by its removal. The budget for 2023 only has provisions for subsidy up to June 2023 and the Petroleum Industry Act (PIA) also states that all petroleum products must be deregulated 18 months after the effective date of the removal of PMs, which is also up to June 2023.
The fuel subsidy has been a contentious issue in Nigeria, with some arguing that it is unsustainable and puts pressure on the government's finances. Others argue that it is necessary to keep fuel prices affordable for the average Nigerian, who is already struggling with high living costs. The subsidy has been a target for removal for years, with previous administrations attempting to remove it but facing backlash from Nigerians who rely on affordable fuel for transportation, electricity generation, and cooking.
In 2012, the government attempted to remove the subsidy, resulting in nationwide protests and strikes, which led to a partial reversal of the policy. The subsidy was partially removed in 2020, but the government had to backtrack due to the COVID-19 pandemic and the resulting economic downturn.
The delay in the removal of the subsidy comes at a time when the country is facing several economic challenges, including inflation, high unemployment, and a weak currency. The government has been attempting to address these issues by implementing economic reforms, but progress has been slow.
The government has also been grappling with security challenges, including an insurgency in the Northeast, banditry in the Northwest, and secessionist movements in the Southeast. These security challenges have further strained the government's finances, as it has to spend more on security-related expenses.
The government's decision to delay the removal of the subsidy has been welcomed by some Nigerians who believe that it would have had a negative impact on their lives. Others, however, argue that the subsidy should be removed as it is unsustainable and puts pressure on the government's finances. The government's decision to delay the removal of the subsidy suggests that it is attempting to strike a balance between the need to remove the subsidy and the need to mitigate its impact on ordinary Nigerians.