The Presidency, on Wednesday, said Nigerians will pay a price for the federal government’s decision to maintain fuel subsidy for the next 18 months.
The warning came as the Federal Executive Council (FEC) approved a N3 trillion lifeline to cater for the payments for this year.
The government’s payment plan announced at the end of the FEC meeting on Wednesday would jerk up the N17.1 trillion budget for 2022, which is criticised for its huge deficit.
Presidential spokesman, Femi Adesina, had stated earlier on Channels Television’s Sunrise Daily programme that Nigerians would have to pay a price if the subsidy is retained beyond June 2022.
He also dismissed insinuations especially by the Peoples Democratic Party (PDP) that the decision by the federal government to retain
fuel subsidy was based on the 2023 elections.
He said the decision had left the government with no other choice than to continue borrowing to fulfil its fiscal obligations.
Adesina said: “It is done because as the minister of finance stated, the timing is not auspicious, inflation is still high.
“In the past eight months, we saw inflation reducing but last month, it went up again; further consultations need to happen with all the stakeholders… The timing is not right, it will exacerbate the hardship of the people and the president genuinely cares.
“Politics is part of our lives, but elections will just be one event in the life of the country. When elections come, they go, the country continues. This fuel subsidy, whether it stays or goes, is going to have a serious impact on the economy.”
On the financial cost of the 18-month extension for subsidy removal, the presidential spokesperson said: “Head or tail, Nigeria will have to pay a price; it is either we pay the price for the removal in consonance and in conjunction with the understanding of the people. The other cost is that borrowings may continue and things may be difficult fiscally for both the state and the federal government.”
Minister justifies subsidy hike
The Minister of Finance, Budget and National Planning, Zainab Ahmed, who briefed newsmen after the FEC meeting at the Presidential Villa on Wednesday, said the federal government has proposed a N3 trillion budget to meet the incremental fuel subsidy request in the 2022 budget.
According to her, only N443 billion had been provided for in the budget passed, which was meant to accommodate subsidies from January to June.
She said the new request was considered by the Council, which directed the ministry to approach the National Assembly for an amendment to the fiscal framework as well as the budget.
“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month.”
Gives conflicting figures on monthly subsidy payment
On Monday, the finance minister met with the Senate President, Ahmad Lawan on the petrol subsidy issue where she stated that the average being paid monthly is around N250 billion.
But while briefing the State House reporters yesterday, the minister said the N3 trillion planned spending on petrol subsidy, specifically the N2.557tr to be spent from July 2022, would be about N270bn per month.
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