MINISTER of Finance, Budget and National Planning Zainab Ahmed says the Nigerian government plans to remove fuel subsidy in 2022 and cushion the effect by paying N5000 monthly transportation grant to 40 million Nigerians.
Speaking at the launch of the World Bank Nigeria Development Update (NDU) on Tuesday, the minister said the grant would go to about 30 to 40 million Nigerians who make up the country’s poorest population.
“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidy, we are working with our partners on measures to cushion the potential negative impact of the removal on the most vulnerable at the bottom 40 per cent of the population.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 – 40 million deserving Nigerians,” she said.
According to the minister, the subsidy regime in the oil sector was unsustainable and economically disingenuous.
The World Bank in the development update said the poorest 40 per cent in Nigeria consume less than three per cent of the total PMS in the country, noting that the rich were profiting more from the subsidy.
“I agree with the report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilizing cash transfers to safeguard the welfare of poor and middle-class households,” the minister added.
She explained that the Federal Government hopes to phase out fuel subsidy before June 2022 — in line with the Petroleum Industry Act (PIA).