"In June 2023, we should be able to exit," an official said.
Nigeria's Minister of Finance, Zainab Ahmed, said Tuesday that it will be more appropriate for the government to begin the implementation of its fuel subsidy policy in the second quarter of the year.
Mrs Ahmed disclosed this while speaking during an interview with Arise TV at the ongoing World Economic Forum (WEF) in Davos, Switzerland, on Tuesday.
The minister noted that the country needs to exit the fuel subsidy regime because it is a very significant contributory factor to revenue loss.
"You can look at it in two ways, the payments made are revenues that would have come to the government but don't because it is being spent on fuel subsidy.
"Also, where there is not enough revenue to buy the refined petroleum products, we have to borrow to buy the products, so, if we take that out, that is over N3 trillion, it's a significant relief if we do not incur any more than that number that we projected for 2023," she said.
Responding to why the petroleum subsidy was not removed in July last year as earlier planned, she said as a collective decision, the government decided to extend the date as a result of the lingering impacts of the Covid-19 pandemic and the heightened inflation in the country.
Mrs Ahmed added that the removal of the fuel subsidy at that time would have increased the burden on the Nigerian citizens and the president did not want that.
"Betrayed? No, It was a decision that was taken as a collective, recognising the fact that due to the lingering impact of the COVID-19 pandemic, and also heightened inflation, the removal of the first subsidy at that time will have increased more burden on the citizens.
"The president does not want to contemplate a situation where measures are taken that are further going to burden the citizens. So, the decision was to extend the period from June 2022 to 18 months, beginning from January 2022," she added.
"In June 2023, we should be able to exit. The good thing is, we hear a consistent message that everybody is saying this thing needs to go because it is not serving the majority of Nigerians. Also, some new candidates running for the 2023 elections are also saying the subsidy regime needs to end.
"What will be safer is for the current administration to start removing the fuel subsidy at the beginning of the second quarter because it's more expedient if you remove it gradually than to wait and move it all at once."
She explained that the idea in the 2023 budget is that fuel subsidy costs should not exceed N3.36 trillion, adding that "whether it is done completely 100 per cent by June or otherwise, it's the process and the cost that counts."
The Nigerian government has, for decades, subsidised fuel and fixed retail prices of petroleum products.
In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a monthly N5,000 transport grant for poor Nigerians.
But the government later suspended the plan after the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) threatened to embark on mass protests.
At the time, Mrs Ahmed said the Nigerian government realised that the timing of its planned removal of petrol subsidy was "problematic", and will worsen the suffering of Nigerians.