The Federal Government is considering payment of transport allowance to Nigerians for at least six to twelve months.
The palliative according to the government is to relieve citizens from the effect of fuel subsidy removal.
This is as President Muhammadu Buhari-led government plans to end the oil subsidy regime in Nigeria by the second half of 2022.
The government had lamented that fuel subsidy is costing the country resources that should have been channelled to other sections of importance like education and health.
Appearing on Channels Television live programme on Thursday, November 11, Minister of Finance, Zainab Ahmed said the Petroleum Industry Act (PIA) provides that petroleum products should be deregulated, adding that deregulation will take effect in July 2022.
According to her, the government has been wasteful enough on the removal of subsidies. The minister described fuel subsidy as a “major drain and waste” on the country’s economy, adding that it is crucial that the country exit from the fuel subsidy regime.
She said: “In making our plans at least in the 2022 budget, we assumed that this deregulation will take effect from July 2022.
“While the act was passed. The president said there would be a one-year timeframe within which implementation will be made, moving from the status quo to the provisions of PIA.
“We assume that by June we will be able to exit the fuel subsidy, and we have made provision only up till June in the budget for fuel subsidy.”
Responding to questions from journalists on if the federal government is prepared for a scenario in which labour unions will reject fuel subsidy removal, Ahmed said the federal government is planning the deployment of compressed natural gas (CNG) vehicles as an alternative to petrol-aided vehicles.
She insists that fortunes spent on fuel subsidy will hence be useful for some infrastructural development, adding that the federal government is considering the payment of transport allowance to Nigerians for six or 12 months to cushion the effect of fuel subsidy removal.
According to Ahmed, the transport allowance will be transferred directly to the bank accounts of the right people through the help of a bank verification number and national identity number.
The Minister added: “What we are doing now is — we’ve been negotiating with labour. We are planning and deploying CNG — which is an alternative to mass transit to PMS.
“Transport subsidy that would be given directly to individuals. What is constraining us is the issue of registration. The national identity registration process is ongoing and we want to make sure that this subsidy goes into the hands of the right people.
“That we can make transfers to people using their BVNs, account number and national identity number, and we know that it has gone to the right people.
“That is part of the things we are negotiating and working on. We are also engaging with the World Bank in designing a programme that will help us to provide succour for at least a minimum of 6 months, maximum of 12 months to enable us to make that transition.”
Asked when the fuel subsidy regime would end permanently, she said, “If you look at what I said earlier, as from July 2022, there is no provision for fuel subsidy.”
Ahmed reiterated that Nigerians should forget fuel subsidy in July 2022, noting that the government is trying to see if it can make it earlier.