• Friday, June 21, 2024
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Fuel subsidy: Finance minister Ahmed links economic hardship as reason for extension

Fuel subsidy: Finance minister Ahmed links economic hardship as reason for extension

Zainab Ahmed, the minister of finance, budget, and planning, has given the “fear of worsening the economic situation of Nigerians” as the main reason why her June 2022 deadline to remove the fuel subsidy was not actualized.

Ahmed made this known on Tuesday at Davos, Switzerland, during her interview with ARISE TV, where she is attending the World Economic Forum.

She admitted that at first the decision to shelve the removal scheduled for June 2022 was painful, but after due consultation with the president and some key cabinet members of the Federal Government, she accepted the president’s decision to extend the deadline.

“Betrayed NO!” Ahmed answered when asked if the federal government’s decision to shift the deadline was a betrayal of her trust. “It was a decision that was taken as a collective. Recognizing the fact that due to the lingering impact of the COVID-19 pandemic and also the heightening of inflation, the removal of the fuel subsidy at that time would have increased the burden on the citizens, and the president does not want to contemplate a situation where measures that are taken would further burden the citizens.”

Read also: ‘Fuel subsidy amid high freight charges squeezes FG’s revenue’

She admitted that, after due consultation, she decided, with approval from the president, to extend the deadline by 18 months, with the removal billed for June 2023.

“So the situation was to extend the period from June 2022 to 18 months beginning from January 2022, so in June 2023 we should be able to exit,” she added. She expressed delight and optimism about the direction the call for the removal of fuel subsidy is taking. She admitted that the fact that it is a key policy decision for most of the contenders vying to take over from President Muhammadu Buhari confirms the need to deal with this issue.

The finance minister said, “The good thing is that we hear a consistent message that everybody is saying that this thing needs to go… I listen to some of the new leaders that are campaigning for the next round of leadership and are saying that they would get rid of it.”

She agreed that now that everybody was calling for it to be removed, she advised that a gradual removal should be the direction to take rather than outright removal. “It is more expedient if you remove it gradually than to wait and remove it all in one big hug,” she emphasized.

She suggested that instead of waiting for the next administration to remove the fuel subsidy, the current administration can take the step by initiating a gradual removal by the “beginning of the second quarter.”

“Subsidy costs should not exceed that N3.2trillion,” she advised.