Federal government will next month remove 36 per cent oil subsidy, bringing the price per litre of petrol of 51.87 kobo as against its present pump head price 39 kobo, authoritative government sources have revealed.
According to the sources N2.5 billion will be withdrawn in this first phase.
The decision to remove the 36 per cent subsidy (12.87 kobo) was arrived at after series of meeting between ministries of finance, labour, employment and productivity, energy experts and officials of NNPC.
It was gathered that the first phase of oil subsidy withdrawal will be undertaken by government at the end of March when sentiments on the issue would be subsided a bit.
According to sources, the federal government has stepped up advertisements on the rationale for oil subsidy removal on both radio and television in order to sell the idea to Nigerians.
As a result, the federal government set up a special committee on public enlightenment to convince Nigerians on the need for the removal.
According to the special public enlightenment committee for every barrel of petroleum used in Nigeria, the nation loses N65.24 in revenue at the connective of the dollars to naira.
The committee sources argued that since about 290,000 barrels of crude oil are consumed locally per day, Nigeria suffers a loss of revenue to the tune of N6.8 billiion naria.
Thjis N6.8 billion, the committee sources said can be used to make life easier and better for the majority of Nigerians by financing agriculture for cheaper food, providing employment, outs and good mass transportation system. The sources further said that the intention to withdraw the oil subsidy was stated succinctly in the 1988 budget provision.
The sources said that the special self-liquidating fund is to the financed from oil subsidy withdrawal, being the equivalent of the N2.5 billion expected to be realised from the withdrawal.
According to the budget speech of Gen. Babangida a special self-liquidating fund has been created which arises from re-scheduled external debts for which equivalent naira sum had already been paid and held at the Central Bank of Nigeria.
From this account, the president had said the sum of N2.5 billion borrowing has been negotiated by government with the Central of Nigeria.
It is to be repaid in the course of 1988. In this connection, the president had said, I must stress that repayment of this non-revenue receipts of N2.5 billions amounts to making a clear choice between taxing ourselves in terms of price adjustment on certain goods and services and increase on external borrowing. We have chosen the former.
