The Minister of finance Wale Edun has insisted that fuel subsidy removal is an ongoing process that depends on a combination of factors.
The Minister of Finance was responding to comments on a Live Channels TV interview where he responded to a wide range of domestic economic issues.
The removal of fuel subsidy has been a contentious issue for some months as crude oil prices increase and the exchange rate continues to depreciate, leading critics to suggest partial subsidy remains despite talk of a removal.
Responding directly to the question of whether fuel subsidy has been removed or not, Edun said:
“The fuel price is determined by dynamics. The exchange rate plays a part. Domestic production of petroleum plays a part. To the extent that the fuel is imported, that means that the more supply of foreign exchange we have, of course, the lower the price.
“Clearly, it is a combination of pivoting away from petroleum imports. Now, we are focusing more on CNG.
“It is an ongoing conversation, it is an ongoing process of ensuring that fuel subsidy that fuel subsidy is eliminated from the Nigerian economy, that is what Mr. President intent is and that is what is being worked towards”.
FG focusing on difficult areas of the economy
Accordingly, Edun said the particular difficult areas now are what is being focused, urging Nigerians to be optimistic about the economy.
We are working to reduce transport costs and increase the citizens’ purchasing power.
Edun also added that that is why the Central Bank is focusing on policies to rein in inflation, emphasizing that inflation is the key impediment to the national growth.
“We do have reasons to be optimistic. Difficult as it is, those particular difficult areas now are what is being focused on, including fuel prices, to get down transport cost.
“We want to put purchasing power back in the hands of Nigerians. The fight against inflation is a fight for all because inflation destroys the very fabric of the society.
“That is why the Central Bank as an independent controller of monetary policy is emphasizing it. Nigeria is on the right path,” Edun added.
What you should know
Recently, the idea of reinstatement of fuel subsidy has been a contentious topic in public discourse, with several observers maintaining that the federal government has restarted the subsidy on petrol since its removal on May 29, 2023.
In addition, the Special Adviser to the President on Energy, Mrs. Olu Veŕheijen, said that the Federal Government reserves the right to pay fuel subsidy intermittently to cushion hardship in the country.
For instance, the former governor of Kaduna State, Nasir El Rufai, said the federal government is spending more on petrol subsidy than before.
In addition, the Special Adviser to the President on Energy, Mrs. Olu Veŕheijen, said that the Federal Government reserves the right to pay fuel subsidy intermittently to cushion hardship in the country.
On its part, however, NNPC has insisted that no subsidy is paid to its account from the federal government.
Addressing the issue in August 2023, the GCEO of the oil firm, Mele Kyari, stated that the company is only recovering the cost of import, adding that the federal government hasn’t paid a subsidy since May.
- “I told you there’s no subsidy whatsoever, we are recovering our full cost from the products that we import. We sell to the market, we understand why the marketers are unable to import. We hope that they do this very quickly and these are some of the interventions the government is doing. There is no subsidy.” Kyari said.