An economist, Paul Alaje has said that as a developing nation, it is possible for the federal government to remove subsidies on petrol and float the foreign exchange market simultaneously.
Alaje disclosed this during a live interview on Arise Television on Tuesday.
He stated that the floatation of the naira is severely impacting the economy and everything we do, particularly the commodities we consume including PMS to even the price of drugs.
He said “You cannot as a developing nation, on one hand, remove subsidy and at the same time float your currency.
“Floatation is having an impact on everything that we do, especially the commodities that we consume including PMS which is largely imported into the country and even to the price of drugs.”
He further said that subsidy is still being paid by the government regardless of the name it’s given, “be it shortfall or under recovery or subsidy”.
He emphasized that what is important is the purpose of what it is used for.
“What is important is the functionality. Here is it, we are supposed to be selling PMS at average between N1050 to N1200.
“So the government considering cost, time and variation says sell certain price.
“That original price minus the price we are buying forms what you call “under-recovery”, what you call “shortfall”, what you call “subsidy”.
“The truth is that the government is still making some kind of payment,” Alaje added.
Recall that the Group Managing Director of the Nigerian National Petroleum Corporation Limited, Mele Kyari had stated that there was no subsidy whatsoever.
Kyari disclosed this on Monday while addressing pressmen.
He further said that the NNPCL recovers its full cost on imports as it sells its products in the market.
“I told you guys, no subsidy whatsoever. We are recovering our full cost from the products that we import.
“We sell to the market. We understand why marketers are unable to import.
“We hope they do this very quickly,” he said.
