No Petrol, Electricity subsidy in 2021 – Nigerian government

The Federal Government insists that it will go ahead with its policy on the removal of subsidy on Premium Motor Spirit (Petrol) and electricity with no provision made in the 2021 budget for their subsidy.

The Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this during a virtual public presentation of the Breakdown and Highlights of 2021 Appropriation Act on Tuesday in Abuja.

Short video from Virtual Public Presentation of the approved 2021 Budget. Download the presentation via link below for further details. We thank you for taking the time to join us earlier with Hon. Ministers @ZShamsuna @ClemAgba https://t.co/Y5lo0ISLCo #AppropriationAct2021 pic.twitter.com/xL3heIpXmh

— Ministry of Finance, Budget and National Planning (@FinMinNigeria) January 12, 2021

While answering a question on whether there would be a return to the petrol subsidy following the reduction in petrol price about a month ago, the Minister said the answer is a flat 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.”

Also, while talking about the new Finance Act 2020, which took effect from 1 January 2021, Ahmed said the act adopts counter-cyclical fiscal policies in response to the Covid-19 pandemic by providing financial relief to taxpayers.

The Minister stated that the government would hold the unclaimed dividends of investors in the stock market in trust and would make the fund available when needed by an investor.

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.”

Recall that the Federal Government in early 2020, announced the full deregulation of the downstream sector of the oil industry which culminated in the removal of petrol subsidy.

The government said that following a sharp drop in revenue, it was becoming increasingly unsustainable for it to continue to subsidize the product with funds that can be used for the development of critical infrastructures in the country.

Similarly, it also pointed out that the removal of subsidy on electricity tariff and ensuring the implementation of the right pricing for power will help attract the needed investment in that sector.

Suzan O