Ndubuisi Francis in Abuja
The federal government disclosed Tuesday that it was planning the payment of a monthly N5,000 transport grant to between 30 million and 40 million poor Nigerians as it prepares to remove subsidy on petroleum motor spirit (PMS), otherwise known as fuel, next year.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, made the disclosure in Abuja at the launch of the World Bank’s Nigeria Development Update (NDU).
According to her, the available resources after the removal of fuel subsidy will determine the number of beneficiaries, regretting that fuel subsidy is no longer sustainable as government spends trillions of naira yearly on payment of subsidy on petroleum products.
The minister stated that the N5, 000 transport subsidy would be by way of conditional cash transfer.
She said: “The subsidies regime in the [oil] sector remains unsustainable and economically disingenuous.”
“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% 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.”
“We are very optimistic that the recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021, hopefully, the full reactivation of the 4 public refineries in the country, and the completion and coming on stream of the 3 private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts,” Mr Ahmed added.
“I agree with the report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilizing cash transfers to safeguard the welfare of poor and middle-class households.”