Tanya Davidson
Port Harcourt — The Minister of State for Petroleum Resources, Heineken Lokpobiri, has defended the Federal Government’s decision to remove petrol subsidy, citing the fiscal burden of the former regime and increased revenue available for distribution among Nigeria’s tiers of government.
Lokpobiri said President Bola Ahmed Tinubu’s decision to discontinue petroleum subsidy payments on May 29, 2023, marked a major shift in the country’s economic policy.
The minister said the former subsidy regime imposed “significant fiscal costs” on the country, while the subsequent downstream deregulation and subsidy removal created opportunities for substantial fiscal savings and increased government revenue.
Speaking on Channels Television’s Politics Today, Lokpobiri said the reform should be assessed against both its immediate costs and longer-term fiscal implications.
“To cushion the effects that may have come with the reform, because change is never easy, the Government has instituted several interventions,” he said.
He listed the Nigeria Education Loan Fund, NELFUND, wage award for civil servants, review of the national minimum wage, Presidential CNG Initiative, conditional cash transfers and support for small businesses and vulnerable households among the measures introduced to mitigate the impact of the reform.
According to him, the fiscal savings generated by the removal of subsidy have also increased revenue available for distribution among the Federal Government, states and local governments.
The minister acknowledged that the reform has imposed immediate economic pressures on households and businesses, but maintained that its implications extend beyond the short-term impact of higher petroleum prices.
“Ultimately, the reform remains a significant economic policy shift, with both immediate costs and longer-term fiscal implications for Nigeria,” Lokpobiri said.
