Vice President, Professor Yemi Osinbajo has said Nigeria’s sustenance of fuel subsidy is practically impossible amidst the country’s growing financial and economic difficulties.
He said the country does not have the resources to finance the program and emphasized that the move is both an absolute necessity and an economic approach to solving the current country’s economic situations.
The Vice President was responding to questions from a team of journalists from the Paris based Africa Report Magazine on the state of Nigeria’s economy and the federal government’s roadmap called the Economic Sustainability Plan
Osinbajo’s comments come amidst threats of strike actions and closure of economic activities by the country’s organised labour. The unions – Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) – recent meeting with the federal government was adjourned on Thursday up till Monday after both sides failed to agree on terms for the resolution of the dispute over the increase in petrol price and electricity tariffs in the country.
“Just to explain what these subsidies cost, in 2018 we paid about N722bn and in 2019 we paid N546bn in subsidies.
Today our entire budgetary package for the economic sustainability plan, in other words, cash we can make available in the budget is N500bn, so that tells you what the difficulties are, so we want to do a sustainability plan that’ll ensure businesses survive to be able to ensure that we are able to provide services and pay salaries.
“All we have is N500bn for the budget, that’s for the economic sustainability plan but in 2019 we paid N546bn in subsidies, previously N722bn, now with 60% less revenue we just don’t have the money and that’s the honest truth,” Osinbajo said.
The vice president is now urging Nigerians to focus on the compressed natural gas (CNG) which he says costs lower than the widely used premium motor spirit (PMS) or petrol.
“We’ve got to focus on the compressed natural gas which is about half the price of petrol today. If we use CNG for our cars and our buses, it will cost about 78 and 80 Naira per litre and we are thinking if we convert cars, of course, government will bear the cost of conversion of cars and buses so that they can use both CNG and petrol so that the average person who owns a car or a transporter will be able to power their cars at about half the cost they are paying today and we already have an experiment going on in Edo state about converting cars.
“The whole of India use CNG, in fact, India doesn’t even have petrol or gas but they import gas and use CNG. So we think this is the way to go for us, we think expensive petrol subsidies cannot even be sustained because we simply don’t have the resources to do so and that’s part of the strategy we are adopting,” he said.