The federal government has said it will pay transportation palliative to Nigerians for a period of six to 12 months after the removal of fuel subsidy in mid 2022.
Minister of finance, Zainab Ahmed, who disclosed this in an interview monitored on Channels Television, said fuel subsidy was a major drain and waste on the country’s resources and so, not sustainable.
She stated this while responding to a poser on how the government planned to respond to protests against the subsidy removal, especially by labour unions.
The minister said apart from considering the payment of transport allowance to Nigerians for six or 12 months to cushion the effect of fuel subsidy removal, the federal government was also planning the deployment of compressed natural gas (CNG) vehicles as an alternative to petrol-aided vehicles.
She said the transport allowance will be transferred directly to the bank accounts of the right people through the help of bank verification number and national identity number.
“…we are also looking at providing some palliatives for a large number of the population in terms of maybe a transport subsidy for a short period like six months or if it is long, maybe nine months or maximum 12 months.
“Transport subsidy that would be given directly to individuals. What is constraining us is the issue of registration. The national identity registration process is ongoing and we want to make sure that this subsidy goes into the hands of the right people.
“That we can make transfers to people using their BVNs, account number and national identity number, and we know that it has gone to the right people.
“That is part of the things we are negotiating and working on. We are also engaging with the World Bank in designing a programme that will help us to provide succour for at least a minimum of 6 months, maximum of 12 months to enable us to make that transition.”
According to her, resources voted for subsidy payment could be voted to other sectors like health and education.
Ahmed explained that in line with the new Petroleum Industry Act (PIA), petroleum products are to be deregulated, with effect from July 2022 and this was planned for in the 2022 budget.
“We assume that by June, we will be able to exit the fuel subsidy, and we have made provision only up till June in the budget for fuel subsidy.
“And it is important that we exit this subsidy. It is costing us a significant amount of resources that we could have applied for education, health and critical infrastructure. It is a major waste and a major drain on the economy.”
Ahmed further noted that while July 2022 was the projected date for total fuel subsidy removal, “… if we are able to get the funding to provide this alternative transport allowance, then we will be able to make it earlier.”
