728 x 90

FG to stop fuel subsidy in June 2023

FG to stop fuel subsidy in June 2023
Photo by Felix Varela- Ask Nigeria

Nigeria loses $2.5 billion to inability to meet 1.8 million oil barrels per day.

In December, 2022, there was an increase in production of crude oil in Nigeria by 4.2 percent to 1.23 million barrels per day, regardless of this increase, Nigeria Employers’ Consultative Association (NECA), asserted that there is still shortage of production. According to the Director General of NECA, Adewale-Smatt Oyerinde, shortage of 0.57 million barrels per day has been resulting to monthly loss of $2.5 billion for the country. Reduction in the government’s revenue is also as a result of the worsened state of oil theft and unsustainable subsidy on petroleum products.

Oyerinde urged the incoming government to reveal the political will for implementation of policies that will return the economy back to the path of growth. He added that all leakages – oil thefts, skewed concessions, fuel subsidy, and others – in the government’s revenue has to be blocked. There should also be an initiation of a full review of the tax administration to make it investor-friendly and for equitability. It was also said that Nigeria should not continue to charge high tax rates on businesses and citizens while governments in other countries were reducing tax rates for enhancement of economic activities, attraction of investors and promotion of sustainable consumption.

Association says Nigeria suffers misplacement of economic priorities.

NECA DG added that the incoming government initiates strategies for diversification of the revenue base by reviving lagging non-oil sectors of the country as the country currently has N77 trillion debt with no visible impact on infrastructural development. The situation of the country is as a result of misplaced priorities as revealed over the last decade. The country spent about N10 trillion on fuel subsidy, over N15 trillion on Capital Expenditure, about N2.5 trillion on Health and N3.9 trillion on Education. The aforementioned allocation of funds has shown that critical developmental sectors – health, education and infrastructure – are suffering from misplacement of economic priorities.

Chief Ukadike Chinedu, the National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said that the fuel supply of the country is worsened by subsidy and fuel importation. He stated that the exchange rate also affects importation of petroleum products which is the reason why petroleum products are expensive. Refining petroleum in the country and ensuring functionality of the depots are likely solutions to the current situation. He added that it is expected that when an administration is leaving office, scarcity of products is usually apparent.

Economy will improve if costs of petroleum products are market driven.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, in his speech at the scorecard series (2015-2023) of the President Muhammadu Buhari-led administration in Abuja, stated that investors would keep shunning investment in Nigeria’s downstream oil sector owing to the fact that the costs of petroleum products were not market driven until the end of the regime of subsidy in the country. He expressed his concerns over the continuous operation of petrol subsidy regime by the government and declared that it should be discarded.

Sylva suggested possibilities of investors to invest in a country with subsidized regime and asserted that refinery would not be profitable in the same period of subsidy. With a market driven condition in the downstream oil sector, there will be an improvement in the economy as investors would like to invest. Also, with the creation of more refineries in the country, there will be an end to difficulty in accessibility of petroleum products. Even the Nigerian National Petroleum Company Limited (NNPC) has been selling fuel without profit due to PMS subsidy.

Petrol subsidy is no longer sustainable in the country.

Zainab Ahmed, the Minister of Finance, Budget and National Planning, affirmed that the federal government had set aside a budget of N3.6 trillion for petrol subsidy till June 2023. Resultantly, oil marketers asserted that the problem of supply in the downstream oil sector, which leads to fuel scarcity most times, is likely to persist till June. According to Sylva, the cost of petroleum products in Nigeria was less than what was gained in other countries, but he stated that the current national consensus emphasized the unsustainability on petrol subsidy.


Related Link

Stakeholderdemocracy: Website

The content on AskNigeria.com is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. AskNigeria.com accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.

Fact Checking Tool – Snopes.com

0 0 votes
Rate This Article
21 comments
21 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Admin
1
16 days ago

FG to stop fuel subsidy in June 2023Nigeria loses $2.5 billion to inability to meet 1.8 million oil barrels per day. – Express your point of view.

Member
9
15 days ago

At last fuel subsidy would be removed despite all the clamour for it from past government and all the denials by this present administration so they are now at the forefront of removal of subsidy.

Abusi
Member
8
15 days ago

How do they want to stop this fuel subsidy when they will be leaving by May, 2023. I just hope they are not trying to fool us again.

Member
8
15 days ago

The deteriorating situation of oil theft and the unsustainable subsidy on petroleum goods are both contributing factors in the decline in the government’s revenue, which can also be attributed to both of these factors.

Member
8
15 days ago

The newly elected government must demonstrate the political willpower necessary to carry out the policies that will set the economy back on the path to expansion.

Member
8
15 days ago

the new government that is going to take over needs to demonstrate that it has the political will to carry out the policies that will get the economy back on track for growth.

Member
8
15 days ago

The importation of petroleum goods is another factor that is affected by currency exchange rates, which is one of the reasons why petroleum products are so expensive.

Member
8
15 days ago

Until the regime of subsidy in Nigeria is ended, investors will continue to avoid the downstream oil sector. This is because prices for petroleum products are not set by the market.

Member
8
15 days ago

The oil industry conditions that are driven by the market will lead to increased investor interest, which in turn will lead to an improvement in the economy.

Member
8
15 days ago

Even though the price of oil products in Nigeria is lower than in other countries, he said that the national consensus right now is that the petrol subsidy is not sustainable.

Member
8
15 days ago

Government and their funny tactics or should I call it strategies? We all know it isn’t likely this happens anymore. Eye has been cleared they are being written off already. We hope for a better govt, the upcoming election.

Member
8
15 days ago

With the sets of corrupt government officials and greedy politician, the subsidy issues will still continue to linger on with no solution but debts piling up. The subsidy should be remove and let everybody face what will come out of it ones and for all.

Member
8
15 days ago

I hope they stop the feel subsidy it will not be this present administration since they won’t be there by june I hope the new administration feed solution to oil problems

Member
8
15 days ago

The current national consensus is that the fuel subsidy is unsustainable, despite the fact that the price of oil products in Nigeria is lower than in other nations.

Member
8
15 days ago

The federal government can’t afford to continue with the payment of subsidy since it is just some people who have constituted themselves has cabals to the nation are the one benefiting. During the administration of former president Jonathan, the government intended to remove the subsidy but people clamour for non removal. It is these same people that see the reason to remove it again. God is watching.

Member
9
15 days ago

FG to stop fuel subsidy in June 2023. After election first. We will know to new party style of running. All this plans for 2023 should rest for now.

Member
8
15 days ago

Another element that is impacted by currency exchange rates is the importation of petroleum items, which is one of the reasons why petroleum products are so expensive.

Member
8
15 days ago

To get the economy back on track toward growth, the newly elected government must show the political determination to implement the measures that will do so.

Member
8
15 days ago

The government’s revenue has decreased, which can also be due to both the worsening oil theft scenario and the unsustainable subsidy on petroleum products.

Member
8
15 days ago

Investment in Nigeria’s downstream oil sector will remain low unless the country’s subsidy regime is changed. For one thing, the market does not determine the cost of petroleum products.

Member
8
15 days ago

Currency exchange rates also play a role in the importation of petroleum commodities, which contributes to their high price.

0 0 votes
Rate This Article