The Federal Government says there is no provision for fuel subsidy in the revised 2020 budget, as Nigeria cannot afford the cost.
This was disclosed by President Muhammadu Buhari in the First Year Ministerial Performance Review Retreat, at the State House on Monday.
Nairametrics reported in July, that the Nigerian National Petroleum Corporation (NNPC) spent over N535.9 billion on subsidy and Federation Account Allocation Committee in the first quarter of 2020.
The Minister of State for Petroleum Resources said in July said that it was unrealistic for the government to still continue with the subsidy regime, especially with the Premium Motor Spirit (PMS) otherwise known as petrol, as it was of no economic value to continue doing so.
He asked Nigerians to ignore the misinformation and misguided comments that have been in the public space on the issue.
According to the Minster, ‘’It has become expedient for the Ministry of Petroleum to explain misconceptions around the issue of Petroleum Products Deregulation. After a thorough examination of the economics of subsidizing PMS for domestic consumption, the government concluded that it was unrealistic to continue with the burden of subsidizing PMS to the tune of trillions of Naira every year.’’
In today’s meeting, President Buhari said there are several negative consequences if the Government should even attempt to go back to the business of fixing or subsidizing PMS prices.
“First of all, it would mean a return to the costly subsidy regime. Today we have 60% less revenues, we just cannot afford the cost. The second danger is the potential return of fuel queues – which has, thankfully, become a thing of the past under this administration”
“ Nigerians no longer have to endure long queues just to buy petrol, often at highly inflated prices. Also, as I hinted earlier, there is no provision for fuel subsidy in the revised 2020 budget, simply because we are not able to afford it, if reasonable provisions must be made for health, education and other social services. We now simply have no choice,” President Buhari said.