Zainab Ahmed, minister of finance, budget and national planning, said the federal government will end gasoline subsidy payments by June 2023.
Ahmed said so on Tuesday during a press conference marking the end of the 28th National Economic Summit (NES) in Abuja.
Gasoline subsidy has been a contentious issue in Nigeria because expenses continues to drain the country’s revenue.
Between January and August 2022, the Federal Government paid N2.565 trillion to settle part of the gasoline subsidy shortfalls.
According to Ahmed, the removal of gasoline subsidies is part of the federal government’s medium-term plan in the budget.
However, she said the challenge was how to remove the subsidy.
“First, we have to engage. We have already engaged with states and the public before it is approved as part of the medium-term plan,” she said.
“We must do this by systematically informing citizens about the amount and the amount of the subsidy.
“We also need to educate them about the opportunity cost of what we can’t do because of the fuel subsidy.”
According to the Minister, the fuel subsidy, in addition to the budget deficit, exerts enormous pressure on the “tax authorities”.
“It’s not money we have; it is money that we have to borrow to maintain the fuel subsidy,” Ahmed explained.
“Some countries have introduced subsidies during COVID-19 and because of the Russian-Ukrainian conflict, but they are using their money to finance these subsidies.
“In our case, we are borrowing to pay the subsidy; it is a double jeopardy. It is something that must stop.
“We are happy that the majority of people in decision-making positions, including political parties, have agreed that subsidies are not sustainable.
“The plan is, for June 2023we must have completely abandoned subsidies, and it must be a gradual process.
The federal government had said it would spend up to 3.3 trillion naira on gasoline subsidy between January and June 2023.