On Tuesday, President Muhammadu Buhari explained why he defied the World Bank and the International Monetary Fund (IMF) in refusing to remove the country’s fuel subsidies.
Despite the Bretton Wood institutions’ repeated calls for it to be removed, the President said in an interview with Bloomberg News that eliminating the fuel subsidy was becoming increasingly untenable.
In January, the federal government postponed the elimination of the fuel subsidy and amended the 2022 budget to include funds for that purpose.
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It went on to approve N3 trillion for fuel subsidy payments this year.
“Fuel subsidies are now being implemented in most Western countries,” he said. Why would we want to get rid of ours at this time? “What’s good for the goose is also good for the gander!” What our western allies are learning the hard way is that what looks good on paper and what has human consequences are not the same thing.
“Late last year, my government put plans in motion to eliminate the subsidy. Such a move became increasingly untenable after additional consultation with stakeholders and as events unfolded this year.”
In addition, the President emphasised the importance of increasing domestic refinery production.
“Capacity is expected to increase significantly later this year and next year, as private players and modular refineries (Dangote Refinery, BUA Group Refinery, Waltersmith Refinery) join the market.”
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“The exchange rate remains vulnerable to external shocks that can hit Nigerians hard and fast.”
“As we increase domestic production, both in fuel (enabled by PIA) and food (agricultural policies), the inflationary threat will fade, and we will be able to move closer to unification,” Buhari added.
