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January 12, 2021

Oil price: We’re not bringing back fuel subsidy, FG insists



The Federal Government, on Monday, ruled out the possibility of reintroducing fuel subsidy payment, about a year after the policy was stopped.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, made this position known, during a public presentation of the 2021 approved budget.

There had been speculations that the Federal Government might be considering bringing back fuel subsidy to cushion the impact of high oil price.

But when asked if the Federal Government was considering the introduction of fuel subsidy to cushion the negative impact of fuel price increase, the Finance Minister said there was currently no plan for such.

She said that there was no provision for fuel subsidy by the government in the 2021 budget.

“We are not bringing back fuel subsidy. There is no provision for fuel subsidy in the 2021 budget. The recent adjustment by the government in the oil industry does not in any way suggest that fuel subsidy is going to be reintroduced,” the minister said.

She said this just as she disclosed that the Federal Government spent a total of N1.8trn on the execution of capital projects in the 2020 fiscal period.

Ahmed said the N1.8trn spent on capital projects for the 2020 fiscal period represented about 89 per cent of the provision made for such projects.

The minister explained that out of the N1.8trn spent on capital projects, the sum of N118.37bn was released for COVID-19 related capital expenditure.

She added that while the Federal Government had projected the sum of N9.97trn expenditure for 2020, it actually spent about N10.08trn, representing 101 per cent performance.

She put the amount spent on debt servicing at N3.27trn, while the sum of N3.19trn was released for payment of salaries and pensions.

She also said the Federal Government generated the sum of N3.94trn in the 2020 fiscal year.

She said the N3.94trn generated during the period represented about 73 per cent of the target for the 2020 fiscal period.

This means that out of the projected revenue target of N5.39trn for 2020, the government could only achieve the sum of N3.94trn.


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