Presidential Aide: Federal Government Reserves Right to Pay Fuel Subsidy

Mrs. Olu Verheijen, the Special Adviser to the President on Energy, has stated that the Federal Government retains the right to pay fuel subsidy intermittently to alleviate economic hardship in the country. She made this assertion while addressing journalists in Abuja on Friday.

This statement comes in the wake of the International Monetary Fund’s report, which suggested that the Nigerian government had reintroduced petroleum subsidies through unconventional means. The IMF estimated that maintaining the current fuel pump price cap and electricity subsidy could cost Nigeria approximately N7 trillion, equivalent to 3% of GDP, in 2024.

Former Minister of State for Defence, Musiliu Obanikoro, also commented on the situation, suggesting that the Federal Government might be adjusting the final price of Premium Motor Spirit (PMS) to bridge the gap between the US dollar and the Nigerian naira. He urged the government to be transparent regarding the status of the subsidy.

When asked about the IMF’s claim and whether the government had indeed reintroduced fuel subsidy, Mrs. Verheijen emphasized that governments worldwide intervene during challenging times to alleviate economic hardship through subsidies. While she did not explicitly state whether the subsidy had been fully reinstated, she stressed that the government was working diligently to maintain fuel prices to lessen the impact on citizens.

The fuel subsidy was removed on May 29; however, Mrs. Verheijen emphasized that the government has the authority to stabilize prices to address social unrest. She concluded by stating, “If the government feels that it cannot continue to allow prices to fluctuate due to high inflation and exchange rates, the government reserves the right to intervene intermittently, and that does not negate the fact that subsidy has been removed.”