The Minister of Finance, Budget and National Planning, Zainab Ahmed, has admitted that food prices are rising.
This contradicts a claim last week by a presidential spokesman, Garba Shehu, that prices of food were on the decline.
Ahmed was answering questions on the Nigerian Television Authority’s programme: ‘Good Morning Nigeria’.
She said: “It’s true that food prices are going up and as I said earlier on, sensible subsidy is the one that is done on production, not on consumption because when you use gasoline in your car, you burn it and you’ve to put it in your car again and burn it.
“But if you now change the regime and say any truck that carries food or produce, the diesel price is subsidised, you’re subsidising production because it means food items get to the market cheaper, but as long as you’re subsidising consumption, whether it’s fuel or electricity, there’ll always be the propensity for gain in the system and then there’s always the fact that you’re subsiding everybody and it’s not everybody that needs it.”
She said the fall in the revenue compelled President Buhari to remove petrol subsidy.
“What we’ve been doing is not sustainable. If we bring back fuel subsidies, we will fail because we will not be able to pay it and the problem of disputes with marketers will come back, then we’ll have queues again. We just cannot afford it and therefore this deregulation must be made to work,” she said.