Petrol price may rise to N340 next year as Nigeria appears set to do away with the subsidy regime that Governor Nasir El-Rufai said costs N250 Billion monthly.
Malam Mele Kyari, Group Managing Director and Chief Executive Officer of Nigerian National Petroleum Company Limited, said that subsidy would have been eliminated in 2020 but certain factors prevented it.
He, however, said that the law provides that by the end of February 2022, the nation should be out of the subsidy regime.
“There will be no provision for it legally in our system.
“But I am also sure you will appreciate that government has a bigger social responsibility to cater for the ordinary and therefore engage in a process that will ensure that we exit in the most subtle and easy manner.”
Kyari assured that fuel subsidy removal would definitely be achieved in 2022 as it was now fully backed by law, adding that the price of the product may range between N320 and N340 per litre.
Kyari, El-Rufai and Finance Minister, Zainab Ahmed spoke in Abuja on Tuesday, at the presentation of the World Bank Nigeria Development Update, November 2021 edition titled “Time for Business Unusual”.
For Nigeria, it will not be business as usual as the country finally makes the bold move do away with subsidy costing over N2 trillion a year.
El-Rufai said state governments are ready to support the Federal Government in the elimination of fuel subsidy regime.
El-Rufai, a panelist who joined virtually, said that if the regime of fuel subsidy was not eliminated, 35 out of the 36 states of the federation may not be able to pay salaries in 2022.
According to him, kerosene which matters most to the masses had been regulated without any hitches, while diesel which was most important to transporters had also been regulated for a long time.
“This hullabaloo about petrol is something that we must as a country have a conversation and agree that it has to end.
“We cannot continue to provide petroleum to our neighbouring countries, which is what we are doing.
“Why are we doing this? For whom are we doing it? Who is the beneficiary? Which is the cabal that is the beneficiary of this and why should they hold this country to ransom and bankrupt the Nigerian economy?
“Right now, we are losing N250 billion a month and this has to end. State governments are committed to supporting the Federal Government on this.
“We do our bit, engage stakeholders and put the facts on the table so that everyone understands the danger the country is in if the subsidy continues, as well as the benefits that will accrue.
“Not only to the budgets of the states and their capacity to deliver social services, but also what will go directly to the pockets of the poorest Nigerians that will bear the brunt of any withdrawal of subsidy.
“This is the position of the state governments and we met just a few days ago to take this position.”
El-Rufai said that the governors saw the dangers in continuing on the path of petroleum subsidy and support policy measures needed to improve the fiscal situation, such as price stability.
This, he said, was by ensuring that there was alignment of the exchange rate and good coordination between fiscal and monetary policy.
