NEWS: Transition panel to Buhari- end fuel subsidy

President, Muhammadu Buhari has been advised by his transition committee to end a fuel subsidy and privatise Nigeria’s four refineries, sources in the All Progressives Congress (APC) told Reuters yesterday.

The government heavily subsidises gasoline and relies on imports for the bulk of 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, who was sworn in as president three weeks ago, is considering the recommendations made in the strategy report produced by the 19-member committee led by retired technocrat Alhaji Ahmed Joda.

“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 privatised 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.

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 next month.

The ailing refinery system generally runs well below capacity, sometimes at just 20 per cent, due to neglect and pipeline sabotage