Fuel Subsidy Removal Generates N400 Billion for Nigerian Government in 30 Days, Says Downstream Operators
In an interview, Chinedu Okonkwo, National President of the Independent Petroleum Marketers Association of Nigeria, revealed that the federal government has amassed N400 billion within the past month since the removal of fuel subsidies. This announcement aligns with the earlier statement made by Mele Kyari, Group Chief Executive Officer of Nigerian National Petroleum Corporation Limited, during a meeting with oil and gas operators in February, where he disclosed that the country was spending N400 billion monthly on fuel subsidies.
Commenting on the repercussions of subsidy removal and the changes in Nigeria’s foreign exchange market, Okonkwo emphasized that the deregulation would have long-term effects. The market-determined price of forex would dictate whether there would be an increase or decrease in fuel prices. However, he also mentioned that the introduction of Compressed Natural Gas (CNG) into the sector would gradually alleviate the impact on the masses.
Okonkwo further elaborated, stating, “You know how much the government is spending monthly on fuel subsidies payment, but that expenditure to the tune of dollars or Naira will be saved. The government has indeed reduced spending on fuel subsidies, though the thing is biting, so we have drafted an alternative in Compressed Natural Gas, CNG.”