President Muhammadu Buhari has vowed to end payment of fuel subsidy in 2023, arguing that it is not sustainable.
This year, the federal government has projected to spend N4 trillion on petrol subsidies, and another estimated N6.7 trillion in 2023.
The president who spoke on Friday during the presentation of the proposed 2023 budget to the national assembly, in Abuja, said subsidy was no longer sustainable considering the current fiscal impact.
Buhari had presented a record N20.51 trillion 2023 appropriation bill to the national assembly, earlier on Friday.
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“As we seek to grow our government revenues, we must also focus on the efficiency of utilisation of our limited resources. Critical steps we are taking include immediate implementation of additional measures towards reducing the cost of governance and the discontinuation of fuel subsidy in 2023 as announced earlier,” he said.
Buhari said discontinuing the policy was necessary for the country to manage its limited resources.
However, he noted that there would be alternative provisions to curb the effects of the petrol subsidy removal.
“We are however mindful of the fact that reducing government spending too drastically can be socially destabilising, and so will continue to implement programmes to support the more vulnerable segments of society,” he said.
“Petrol subsidy has been a recurring and controversial public policy issue in our country since the early eighties. However, its current fiscal impact has clearly shown that the policy is unsustainable.
“As a country, we must now confront this issue taking cognisance of the need to provide safety nets to cushion the attendant effects on some segments of society.”
