PRESIDENT Muhammadu Buhari has explaind to the International Monetary Fund (IMF) and the World Bank why he ignored their advice on fuel subsidy removal.
Buhari, who spoke on the matter in an interview with the ‘Bloomberg’ on Tuesday, June 21, 2022, said Nigeria would remove the subsidy when key targets had been achieved.
According to the President, fuel subsidy removal was put on hold to ensure sufficiency in local refining, and to ensure wider consultations with stakeholders.
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!
“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. But after further consultation with stakeholders, and as events unfolded this year, such a move became increasingly untenable.
“Boosting internal production for refined products shall also help. Capacity is due to step up remarkedly 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 World Bank and the IMF had expressed worry over Nigeria’s massive spending on petrol subsidy at the expense of investment in infrastructure.
But government has decided to continue with the subsidy as marketers constantly push for increase in the pump price of petrol, with fuel scarcity and long queues at filling stations incessantly a feature.
Currently, the country is experiencing another round of scarcity and queues as independent oil marketers complain of displeasure in the supply chain process, despite government’s N4 trillion budget on fuel subsidy, and of high operating and logistics costs.