BY CHIKA OKEKE, Abuja
President Bola Tinubu
President Bola Ahmed Tinubu has ruled out the payment of subsidy on Premium Motor Spirit (PMS) from third quarter of 2023.
Tinubu, who stated this on Monday during his swearing-in as the 16th President of Nigeria at the Eagles Square Abuja, noted that subsidy would automatically seize to exist from July this year.
Currently, Nigeria spends more than $850 million monthly on fuel subsidy as revealed by the Nigerian National Petroleum Company Limited.
News Rider reports that in the last 17 years, from 2005 to mid- 2021, the Federal Government had spent over N13. 697 trillion on the payment of subsidy, just as the Organisation of Petroleum Countries (OPEC) pegged the country's daily import of petrol and diesel at 465,000 barrels per day.
In 2022, the Federal Government spent over N3 trillion on subsidy, while in 2023 budget, N4 trillion was mapped out for fuel subsidy. The capital project for the entire country in 2023 is N6 trillion.
This implies that Nigeria spends at least, N18.397 billion to subsidise PMS daily due to high cost of petroleum products, redundant refineries, wobbly exchange rate, and failure to implement the Petroleum Industry Act (PIA).
Tinubu was emphatic that from the 2023 budget he inherited from the immediate past administration, that subsidy is supposed to end by June, 2023.
The President maintained that the funds set aside for fuel subsidy would be invested in infrastructure, education, healthcare and jobs for Nigerians.
He said: “We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
"We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions."
Recall that in November 2021, the Federal Government declared its intention to remove fuel subsidy and replace it with a monthly N5,000 transport grant for poor Nigerians.
The idea was later jettisoned after the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) threatened to embark on massive protests across the country.
President Tinubu also promised to revisit the naira redesign policy of the Central Bank of Nigeria (CBN), adding that his administration would consider both the old and new naira notes as legal tender.
He hinted that the policy was poorly implemented by the CBN irrespective of the number of unbanked Nigerians.
“Whatever merits it had in concept, the currency swap was too harshly applied by the CBN,” he added.
Tinubu said that the country’s monetary policy needed thorough cleansing, just as he pleaded with the CBN to roll out a unified exchange rate.
“This will direct funds away from arbitrage into meaningful investment in the plant, equipment and jobs that power the real economy.
“The interest rate needs to be reduced to increase investment and consumer purchasing in ways that sustain the economy,” he said.
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