By Kelvin Alohan
Nigeria’s Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has disclosed that the Federal Government is planning to abolish the petrol subsidy regime and replace it with a monthly N5,000 (about $10) transportation grant to the nation’s most vulnerable citizens.
She explained that the monthly N5, 000 payments, which is intended as palliative for vulnerable Nigerians due to the anticipated rise in cost of transportation and living following petrol subsidy removal, will be for a period of one year.
The government is contemplating a total end of the fuel subsidy regime by mid-2022, according to the minister, who disclosed this at the launch of the World Bank Nigeria Development Update in Abuja on Tuesday. She stated at the event that subsidy regime remains unsustainable and economically disingenuous.
She said between 30 and 40 million poor Nigerians will benefit from this intervention, adding however, that the final number of beneficiaries will depend on the resources available after fuel subsidy removal.
“Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40 percent of the population.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5, 000 to between 30 – 40 million deserving Nigerians,” Ahmed stated.
Nigeria currently spends between N140 billion and N150 billion on petrol subsidy monthly, according to the Group Managing Director of the Nigerian National Petroleum Company (NNPC) Limited, Mr. Mele Kyari.
Analysts have said, if petrol subsidy is replaced by the planned monthly transport grant to poor Nigerians, the federal government would be spending between N1.8 trillion and N2.4 trillion on transport grant in a year.