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Nigeria says no more subsidy on electricity tariff, to eliminate fuel subsidy soon

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Nigeria federal government has incrementally removed subsidy on electricity tariff and intends to would move next to eliminate subsidy on fuel consumption, according to the minister of finance and budget, Zainab Ahmed.

Ahmed, who said this at a virtual conference of the Ministers of Finance in Africa noted that the amendment of the 2022 budget was ongoing to accommodate the incremental removal of petrol subsidy, adding that the government had to carefully adjust the prices incrementally at some levels.

“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 pushback from the polity. We have elections coming and because of the hardship that companies and citizens went through during the COVID-19 pandemic, we just felt that the time was not right, so we pulled back on that.

“But we have been able to quietly implement subsidy removal in the electricity sector and as we speak, we don’t have subsidies in the electricity sector.

“We did that incrementally over time by carefully adjusting the prices at some levels while holding the lower levels down,” Ahmed said.

Ahmed said petrol subsidy remained a huge problem for the government as it had thrown up deficits more than what was planned.

READ ALSO: Nigeria airlines cancel flights over fuel scarcity

lg.php?bannerid=0&campaignid=0&zoneid=16&loc=https%3A%2F%2Fwww.thecable.ng%2Fzainab ahmed electricity subsidy removed petrol isShe said the rise in global oil prices would worsen the issue “but the current review that we are doing is to hold the subsidy at the level in which it is 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,” Ahmed said.

“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 the deficit will be as a result of the fluctuation in the global market.”

She added that the government was improving on tax administration and compliance by adopting technology so as to increase revenue.

Fuel subsidy and cost reflective tarrif on electricity has been knothy issue in Africa’s largest economy as the government failed to do what it ought to do inform of local refining of fuel and metering consumers of electricity across the country.

It was said that last year alone, Nigeria spent N1.43 trillion on fuel subsidy, impacting negatively government finance and ability to increase spending on other essential services.

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