TheCable

President Muhammadu Buhari says the federal government’s expenses on petrol subsidy ate into the revenue that should have been available to fund the 2021 budget.

The president spoke on Thursday when he presented the 2022 appropriation bill at the national assembly.

He said the government was forced to suspend a further increase in the pump price of petrol due to opposition from the labour unions and other stakeholders.

Buhari said: “The national assembly will recall that in March 2020 the Petroleum Products Pricing Regulatory Agency announced that the price of petrol would henceforth be determined by market forces.

“However, as the combination of rising crude oil prices and exchange rate combined to push the price above the hitherto regulated price of 145 Naira per litre, opposition against the policy of price deregulation hardened on the part of labour unions in particular.

“Government had to suspend further upward price adjustments while engaging labour on the subject. This petrol subsidy significantly eroded revenues that should have been available to fund the budget.

“On a positive note, we surpassed the non-oil taxes target by eleven (11) percent in aggregate. The sustained improvement in non-oil taxes indicates that some of our revenue reforms are yielding positive results. We expect further improvement in revenue collections later in the year as more corporate entities file their tax returns and we accelerate the implementation of our revenue reforms.”

In the last few years, many stakeholders within and outside the federal government have called for the scrapping of the subsidy regime for premium motor spirit (PMS), better known as petrol.

Zainab Ahmed, minister of finance, budget and national planning, in July 2021, advocated the end of fuel subsidy, saying it “costs as much as N150 billion” monthly.

Her comment came four months after Mele Kyari, general managing director (GMD) of the Nigerian National Petroleum Corporation (NNPC), had said the company “may no longer be in a position” to bear the “subsidy burden”.