Let’s face it. Petroleum subsidy is not going away anytime soon

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Just few days ago, as the 8th National Assembly were winding down, the senate approved the sum of N129 billion ($422 million) payment to cover debts to local oil firms related to a fuel subsidy programme. They listed 67 companies that will get a portion of the payment. The government has struggled for years to make timely subsidy payments to fuel importers.

Has Nigeria reached the point where the downside of huge petroleum subsidy payments by the government outweigh the benefit? Most certainly.

Emmanuel Ibe Kachikwu, immediate past minister of state for petroleum resource, had said there was never been any doubt about the logic of trying to remove fuel subsidy but that the reality is that Nigeria has a very unique situation.

“There is a lot of anti-populism against the decision, so any president that is going to take that decision must weigh all the factors”, Kachikwu told journalists on the sideline of the second annual international conference by the Oil and Gas Trainers Association of Nigeria (OGTAN) in Lagos weeks before the federal executive council cabinet was disbanded.

Zainab Ahmed, immediate past finance minister, also said the Nigerian government has no plan to remove fuel subsidy.

“The IMF would say fuel subsidies are better removed so that you can use the resources for other important sectors, which is good advice, but in Nigeria, we do not have any plans to remove fuel subsidies at this time, because we have not yet designed buffers that will enable us to remove the subsidy and provide cushions for our people”, Ahmed said during a ministerial press briefing at the 2019 International Monetary Fund and World Bank Spring Meetings in Washington DC.

The Nigerian National Petroleum Corporation (NNPC), as the sole importer of petrol into the country