The Federal Government has insisted that its policy on the withdrawal of Premium Motor Spirit (petrol) and electricity subsidies would be followed without any provision being made for their subsidies in the 2021 budget.
This disclosure was made during a virtual public presentation of the Breakdown and Highlights of the 2021 Appropriation Act on Tuesday in Abuja by the Minister of Finance, Budget and National Planning, Zainab Ahmed.
What is being said by the Minister of Finance
While responding to a query as to whether there would be a return to fuel subsidies after the price reduction of petrol about a month ago, the Minister confirmed that the response was an emphatic no.
Ahmed said, “We are not bringing back fuel subsidy. We didn’t make provision for fuel subsidy in the budget. The impact of what was done was reducing some of the cost components that were within the template. And also related to it, on matters of electricity subsidies, no provisions have been made for subsidy for fuel and no provisions have been made for subsidy for electricity.”
In addition, while referring to the new Finance Act 2020, which came into force on 1 January 2021, Ahmed claimed that, in response to the Covid-19 pandemic, the Act adopts counter-cyclical fiscal policies by providing taxpayers with fiscal relief.
The Minister announced that the government would keep in confidence the unclaimed dividends of stock market investors and would make the fund available to an investor if necessary.
She said, “On the issue of unclaimed dividends and government’s accounts and projections, there would be as much as N850bn to be realized in the special trust fund of unclaimed dividends. Government is keeping the money in trust for the beneficiaries. At any time, a registrar or a bank confirms that this is the true and bonafide beneficiary of this fund, then the government will release from that trust fund to the investor who has it.”
It should be recalled that the Federal Government declared the complete deregulation of the downstream oil market at the beginning of 2020, resulting in the abolition of the petrol subsidy.
The government said that it was becoming increasingly unsustainable after a sharp drop in revenue for it to continue subsidizing the commodity with funds that can be used to build essential infrastructures in the country.
Similarly, it also pointed out that the elimination of the electricity tariff subsidy and ensuring the correct price of electricity will help attract the required investment in that market.