The Minister for State for Petroleum, Emmanuel Kachikwu, has disclosed plans to hike fuel price from N87 to N97 per litre in 2016.
The Minister for State for Petroleum, Emmanuel Kachikwu, has disclosed plans to hike fuel price from N87 to N97 per litre in 2016.
Kachikwu briefed the Senate/House of Representatives joint Committee on the Medium Term Expenditure Framework, MTEF, telling them N1trn was paid to subsidise fuel consumption in 2015.
In the past five years the Government has spent over N5trillion on subsidy despite mounting debts and infrastructural deficit.
Kachikwu said: “The total subsidy figure for 2015 when taken along with the NNPC will be in excess of N1 trn.“We can get this specifics but the point is largely that it does not involve NNPC because the agency takes its off-cuff. We will work towards taking those figures off our budget in 2016.“They are critical issues. The current pricing work we are doing had shown that there shouldn’t really be subsidy. The government doesn’t need to subsidise.“There is energy around the removal of subsidy. Most Nigerians we talk to today would say that’s where to go. I have since left the dictionary of subsidy by going to price modulation which is a bit more technical. Price of refined products today is N87.“It was N97 before it was reduced and we really have to go back to that because we don’t really have the finance to remove it.“There are lots of safety barometer between the N87 and N97 per litre regime between which government does not have to fund subsidy. Yet the prices would be fairly close to what it used to be today. That is the first mechanism we are going to work,” he said.
President Muhammadu Buhari during campaigns castigated former President, Goodluck Jonathan for spending huge billions on subsidy. He said the very concept was fraudulent and pledged he would abolish the scheme.
However seven months in, the President has on several occasions switched his rhetoric. “I have received much literature on the need to remove subsidies, but much of it has no depth,” he said recently.
Unfortunately fuel queues have not disappeared despite the billions of Naira spent on subsidies. The product price currently fluctuates between N120 to as high as N400 in some regions of the country.
This raises a huge question; who is benefitting from this, Nigerians or marketers?
Experts have clamoured for the total removal of subsidy payments. These calls are premised on the belief the economy is only equipped to take so much. (The World Bank went as far as saying the past half decade has seen spend close to N7bn on the scheme.)
Information source: post-nigeria
Information source: post-nigeria
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