The Minister of Finance, Budgets and National Planning, Zainab Ahmed, has revealed the Federal Government has quietly removed all subsidies in the power sector.
According to her, there is a plan to gradually end subsidies on petrol.
Ahmed stated this while speaking at a virtual meeting of the International Monetary Fund (IMF) with the theme: “The Political Economy of Fiscal Reforms in Africa”.
The Minister explained that although the government had a setback in its initial plan to have subsidies on petrol removed by July this year, it would work with the National Assembly to have it removed in phases.
“We are cleaning up our subsidies. We had a setback, we were to remove fuel subsidy by July this year but there was a lot of push back from the polity,” Ahmed said.
She added: “But we have been able to quietly implement subsidy removal in the electricity sector and as it is, as we speak, we don’t have subsidies in the electricity sector.
“We did that overtime by carefully adjusting the prices at some levels while holding the lower levels down.
“Fuel subsidy is a huge problem for us. It has thrown up our deficits too much higher than we planned. What is happening now with the global oil prices is also going to worsen matters but the current review that we are doing is to hold the subsidy at the level in which we planned.
“We are currently doing a budget amendment to accommodate incremental subsidy (removal) as a result of the reversal of the decision and we want to cap it at that.
“Hopefully, the parliament will agree with us and we are able to continue with our plan for subsidy (removal) otherwise the way things are going we will not be able to predict where we will be,” Ahmed said.
