Buhari govt working to remove fuel subsidy as electricity subsidy removed – Finance minister reveals

The Minister of Finance, Zainab Ahmed, has revealed that the subsidy on electricity tariff has been removed by President Muhammadu Buhari’s administration.

The Minister said the government has carefully adjusted electricity tariff in the country and is working towards removing all forms of subsidy including the one on fuel.

She stated that at the moment, there is no form of subsidy in the electricity sector.

Newsflash Nigeria understands Mrs Ahmed made the revelation on Thursday at a virtual meeting of African Finance Ministers and the International Monetary Fund.

She added that the government had plans to totally remove fuel subsidy by July this year but prevailing circumstances including the COVID-19 pandemic and the protest by Nigerians made the government shift the time frame.

The Finance Minister further revealed that the government was looking at improving tax administration and compliance as a way of boosting resources.

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In her words, “We are cleaning up our subsidies. We had a setback; we were to remove the fuel subsidy by July this year but there was a lot of pushback from the polity. 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.”

Ahmed added that the government is not relenting on plans for total fuel subsidy removal as it remains the best option in the light of dwindling government resources and economic realities.

“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,” she added.

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