FG plans N5000 cash transfer To “Poor” Nigerians: petrol to Cost N340 After subsidy Removal in 2022

The Federal Government will transfer roughly N2.4 trillion in transportation handouts to about 40 million Nigerians starting next year, as the government prepares to phase off the subsidy on Premium Motor Spirit (PMS).

Most stakeholders, however, are sceptical of the plans’ viability, highlighting concerns about the source of funds, the influence on the volume of money in circulation, as well as issues of transparency and accountability.

Mrs Zainab Ahmed, the Minister of Finance, Budget, and National Planning, unveiled the government’s plans yesterday at the presentation of the World Bank Nigeria Development Update (NDU) headlined ‘Time for Business Unusual’ in Abuja, saying that 40 million of Nigeria’s poorest people would gain.

Nigeria Minister of Finance Zainab Ahmed
Zainab Ahmed

Many Nigerians doubt if that proposition makes sense. “If you’re going to spend N2.4 trillion in a year to remove a subsidy of N1.8 trillion it currently spends, where’s the sense?” according to Jerry Mugana, a policy analyst.

Malam Nasir El-Rufai, the governor of Kaduna State, has stated that state governments are willing to assist the federal government in ending the fuel subsidy regime.

El-Rufai, a panellist who essentially joined the NDU presentation, stated that unless the fuel subsidy scheme is abolished, 35 of the 36 states of the federation may be unable to pay wages in 2022.

“This hullabaloo about petrol is something that we must, as a country, have a conversation and agree that it has to end. We cannot continue to provide petroleum to our neighbouring countries, which is what we are doing.

“Right now, we are losing N250 billion a month and this has to end. State governments are committed to supporting the Federal Government on this. This is the position of the state governments and we met just a few days ago to take this position,” he said.

El-Rufai was one of the leading figures who led 2012 Occupy Nigeria protests with other opposition figures, which ended former President Goodluck Jonathan’s plan to remove the petrol subsidies.

With this latest move, many Nigerians are not sure how the government would recognize the “poor” and ensure they get the monthly transfer.

Subsidies would have been phased out by 2020, according to Malam Mele Kyari, Group Managing Director and Chief Executive Officer of Nigerian National Petroleum Company (NNPC) Limited. He did say, however, that the law states that the country should be subsidy-free by the end of February 2022.

Fuel subsidy removal would be realized in 2022, according to Kyari, because it was now fully backed by legislation, and the price of the product might vary between N320 and N340 per liter.

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