Buhari may dump fuel subsidy

The administration of President Muhammadu Buhari is seriously considering that idea of doing away with the subsidy programme, and privatizing the nation’s refineries, gong by a recommendation made to him by his transition committee.

The committee had been set up by Buhari shortly after he was declared winner of the March 28 presidential election.

Senior sources in the APC, told Reuters on Sunday, that Buhari is seriously considering the recommendations made in the strategy report produced by the 19-member committee led by Ahmed Joda.

Nigeria, which is Africa’s top oil producer and biggest economy, heavily subsidises petrol and kerosene consumption and relies on imports for the bulk of its domestic demand due to an underperforming refining system.

The subsidy regime, which was revealed to have handed out more than N1tn in fraudulent claims to oil marketers in 2012, is proving to be increasingly costly.

“The removal of the fuel subsidy is one of the recommendations of the transition committee,” said a senior APC source, who did not want to be named.

“The committee also suggested to Mr. President that the four refineries be privatised so that the government stops wasting money on annual turnaround maintenance,” he said.

However, commenting on the issue, Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, said that it was premature to comment on the proposal by the committee since its report had not been officially released and discussed by the government.

Buhari’s predecessor, Goodluck Jonathan, cut subsidies by 90 per cent in the 2015 budget because government revenues had been hit by the slump in oil prices.

Nigeria attempted to end subsidies three years ago, doubling the price of a litre of petrol overnight, in efforts to cut government spending.

The move angered citizens who saw cheap pump prices as the only benefit they derive from living in an oil-rich country, and led to eight days of nationwide strikes. The government later reinstated part of the subsidy to end the strikes.

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