Fuel subsidy: What Buhari must do says Kachikwu

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Against the backdrop of the International Monetary Fund’s call for the removal of fuel subsidy in Nigeria, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, has said he will advise President Muhammadu Buhari on what to do.

Dr Ibe Kachikwu

Dr Ibe Kachikwu

The Managing Director, IMF, Christine Lagarde, had during a press conference last week at the joint annual Spring meetings with the World Bank in Washington DC urged the Federal Government to remove fuel subsidy, describing it as the right thing to do.

Lagarde had said that with the low revenue mobilisation that existed in Nigeria in terms of tax to Gross Domestic Product, it was important for the country to remove fuel subsidies and move available funds into improving health, education, and infrastructure, among others.

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Kachikwu, while fielding questions from journalists on the sidelines of the annual international conference of the Oil and Gas Trainers Association of Nigeria in Lagos, said the removal of fuel subsidy in 2016 helped the country.

The Federal Government had on May 11, 2016 announced a new petrol price band of N135 to N145 per litre, a move that signalled the end to fuel subsidy payment to private marketers.

But the government later resorted to subsidy regime following the increase in the landing cost of petrol on the back of rising crude oil prices, with the Nigerian National Petroleum Corporation, the sole importer of the product, bearing the burden of subsidising it.

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“There is no doubt about the logic of trying to remove subsidy. However, the reality is that Nigeria has a very unique situation. You see the reaction immediately from the Nigeria Union of Petroleum and Natural Gas Workers and the Petroleum and Natural Gas Senior Staff Association,” Kachikwu said.

NUPENG and PENGASSAN had in a joint statement on Sunday described as poisonous the IMF’s advice to the Federal Government on fuel subsidy.

Kachikwu added, “So, any president who is going to make that decision will have to weigh all the factors. I did this in 2016 when we took out what was then the subsidy because without that, the country would not have survived.

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