Nigerians may pay as much as N340 per litre of petrol in 2022 after the removal of the current subsidy on the product, it was revealed on Tuesday.
Mele Kyari, Group Managing Director and Chief Executive Officer of Nigerian National Petroleum Company Limited, disclosed this in Abuja while speaking at the presentation of a World Bank Nigeria Development Update.
He said that the subsidy would be removed in the first half of the year, a move that would raise the price of the product to between N320 and N340 per litre.
Even so, the government is planning to cushion the impact of the planned subsidy removal with a transport grant of N5,000 per person among the country’s poorest of the poor.
This was disclosed by Zainab Ahmed, Minister of Finance, Budget and National Planning, who noted that in preparation for the expected removal of the subsidy, the government was making plans to minimize the impact of the removal on Nigerians.
The World Bank in the report called for the removal of the subsidy.
The update by the Bank noted that poorest 40% of people in Nigeria consume less than 3% of the total available petrol in the country. The rich benefit more from the subsidy, it noted.
This came less than a week after the International Monetary Fund, called for the same move.
In a report last week, the IMF said Nigeria must end subsidy on both petrol and electricity in early 2022.
“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 the potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population,” the Minister said.
“One of such measures would be to institute a monthly transport subsidy in the form of cash transfer of N5,000 to between 30 to 40 million deserving Nigerians.
“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 petroleum subsidy while utilising cash transfers to safeguard the welfare of poor and middle-class households,” she said.
“Towards this end, we intend to accelerate our structural reforms, particularly in the power sector, in governance, in business environment to unlock the huge potentials of the economy, scale-up social safety net and deepen financial inclusion to reduce poverty and inequality gaps.”