Buhari considering total fuel subsidy removal
President Muhammadu Buhari, has been advised by his
transition committee to end a fuel subsidy programme and privatize Nigeria's
four refineries, senior sources in his party said on Sunday.
According to Reuters, Nigeria heavily subsidizes petrol and
relies on imports for the bulk of its domestic demand due to an underperforming
refining system.
The subsidy, which was revealed to have paid out more than
$6 billion in fraudulent claims in 2012, is proving to be increasingly costly.
Buhari is considering the recommendations made in the
strategy report produced by a 19-member committee formed from his All
Progressives Congress, APC, party.
"The removal of the fuel subsidy is one of the
recommendations of the transition committee," said a senior APC source,
who did not want to be named.
"The committee also suggested to Mr President that the
four refineries be privatized so that the government stops wasting money on
annual turnaround maintenance," he said.
A second APC source also told Reuters that these
recommendations were contained in the report given to Buhari earlier this
month.
Buhari's predecessor, Goodluck Jonathan, cut subsidies by 90
percent in the 2015 budget because government revenues have been hit by the
slump in oil prices.
Nigeria attempted to end subsidies three years ago, doubling
the price of a liter of petrol overnight, in efforts to cut government
spending.
The move angered citizens who see cheap pump prices as the
only benefit they derive from living in an oil-rich country, and led to eight
days of nationwide strikes. The government later reinstated part of the subsidy
to end the strikes.
The prospect of the subsidy removal contributed to fuel
shortages in the final days of Jonathan's administration as gasoline importers
went on strike saying they were owed money from the government.
Last week, the state-owned Nigerian National Petroleum
Corporation, NNPC said its four oil refineries would resume production in July.
The ailing refinery system generally runs well below
capacity, sometimes at just 20 percent, due to neglect and pipeline sabotage.
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