Mrs. Olu Veŕheijen, the Special Adviser to the President on Energy, emphasized the Federal Government’s prerogative to intermittently implement fuel subsidies as a measure to alleviate hardships in the country. Speaking during a briefing in Abuja on Friday, Veŕheijen responded to concerns raised by the International Monetary Fund (IMF) about the re-introduction of petroleum subsidies through unconventional means.
The IMF projected potential expenditures of approximately N7 trillion, equivalent to 3 percent of Nigeria’s GDP, if the current fuel pump price cap and electricity subsidy are maintained throughout 2024. Additionally, former Minister of State for Defence, Musiliu Obanikoro, raised questions about the Federal Government possibly bridging the currency gap between the U.S. dollar and the Nigerian naira in determining the final price of Premium Motor Spirit (PMS or petrol). Obanikoro urged the government to ensure transparency and communicate clearly regarding the status of subsidies.
When questioned about the alleged return of fuel subsidies in response to the IMF’s claim, Mrs. Veŕheijen explained that governments worldwide intervene during challenging economic times through subsidies to address hardships. While she did not explicitly confirm the full reinstatement of subsidies, she asserted that the government is committed to maintaining fuel prices at a stable level to mitigate the impact on citizens.
“The subsidy was removed on May 29. However, the government has the prerogative to maintain price stability to address social unrest. They reserve the right to intervene,” Mrs. Veŕheijen stated. She further emphasized that the government may intermittently step in if it deems necessary, emphasizing that such intervention does not negate the removal of the subsidy.
