Nigeria to gain N1tr yearly from Subsidy removal

The Federal Government says the country is set to benefit over N1 trillion annually from fuel subsidy removal.

This is according to the Minister of State, Petroleum, Chief Timipre Sylva, who observed that the cash would be deployed to fund other critical components of the economy.

He said: “…Subsidy is unsustainable. Let us look at it: Subsidy means that you buy the product at a certain price and then you reduce the price and sell it at a loss to the people. It is something that is good to do. It is something that our president would like to do so much because of his love for the common man. But is it something that can be sustained in perpetuity? You get the product and sell it less at the pump. And that is not the only subsidy. You also subsidise the effects that is used to import the product. So at the end, the subsidy is going on two ways. It is like burning your candle from both ends. How long can that candle last? So in the wisdom of the President and all of us, we felt that it was time because this subsidy is something that cannot be sustained in perpetuity. It is 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. So, all the money that we used to defend the Naira at that time to subsidise the dollar will now be freed up for development. And, I believe that going forward, we will begin to see a lot more developments, a lot more money available to the government that will be put into critical infrastructure instead of being burnt in our cars”. Sylva added that the subsidy regime was very fraudulent as only a few benefited from it at the expense of the public.

“Let us look at subsidy critically. Who are the beneficiaries of subsidy? When a few years ago you had this subsidy scam all over the place, all the monies that were taken by all the subsidy thieves and so on, how many poor people were among those people? Subsidy only provides opportunity for rich and unscrupulous Nigerians to steal and enrich themselves at our expense, at your expense. So, ladies and gentlemen, deregulation is actually a policy direction that is good for the common Nigerian.”

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