Federal government projects  N1trn saving annually from subsidy removal

Chinazor Megbolu   |   

The Federal Government of Nigeria says the removal of fuel subsidy will help save N1 trillion annually for the country according to a projection made by the Minister of State for Petroleum Resources, Dr. Timipre Sylva in Abuja.

He explained the money saved will be used to fund other critical aspects of the economy.

Sylvia, former Bayelsa State Governor, noted that the previous administrations lacked the political will to remove the subsidy.

According to him; “it’s time for Nigerians to face reality and do the right thing. What is deregulation going to do? It is going to free up a lot more money.

“At least from the very beginning, it will save us up to a trillion and more every year.

“Already, we have taken up the budgetary provision for subsidy, which is about N500 billion in the budget. Also, we have taken off the excess forex price that special rate that was given to NNPC which also came at a cost”. 

He stressed further that all the money that the government used to defend the Naira at that period to subsidise the dollar will now be freed up for development.

“In March, when we announced the deregulation, the prices were low and that advantage was transferred to the consumer. So, we brought down the price of petrol. “The unfortunate thing is that when we brought down the price of petrol, nobody reacted in the marketplace. The prices were the same,” Sylvia said.

He, however, pointed out that to give the deregulation a human face, the government decided to introduce alternative fuel.

“We are giving autogas. Gas will now become fuel for our cars. This programme will be rolled out within the next month.

“So, if you go to a filling station and you convert your car to dual capability or dual fuel, then you drive into a typical filling station you will find gas LPG, you find CNG and NLG being sold. If you look at the price of PMS versus the price of gas and you think that gas is cheaper which of course, it is going to be cheaper,” he said.

Recall that the federal government recently increased the depot price of petrol as determined by the Petroleum Products Marketing Company (PPMC) increased from N138.62 to N151.56 per litre last week.

Due to the adjustment, the retail price of petrol has now risen to as high as N160 to N161 per litre.