Oil and Gas

FG Suspends Planned Removal of Petrol Subsidy in Nigeria

Nigeria’s ministers of Finance, Budget and National Planning, Zainab Ahmed, and her counterpart in the of Petroleum Resources, Timipre Sylva, have stated that the FG is not in a hurry to remove subsidy on petroleum products explaining that provision has been made for subsidy payment to marketers in the 2022 budget.

Both ministers made the revelation on Monday at a session with the President of the Senate, Dr Ahmad Lawan, and other principal officers of the Red Chamber. 

The Minister of Finance, Zainab Ahmed, in her submission, said that there was provision for subsidy payment in the 2022 budget till the end of June, declaring that the payment would cease effective from July. 

“Provision was made in the 2022 budget for subsidy payment from January till June. That suggests that from July, there will be no subsidy. The provision was made as a sequel to the passage of the Petroleum Industry Act, which indicated that all petroleum products would be deregulated. 

“Following the passage of the PIA, we went back to amend the fiscal framework to incorporate the subsidy removal. However, after the budget was passed, we had consultations with a number of stakeholders and it became clear that the timing was problematic. We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry. 

“Mr President does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures. One of these include the rollout of the refining capacities of the existing refineries and the new ones, which would reduce amount of products that would be imported into the country. 

“We, therefore, need to return to the National Assembly to now amend the budget and make additional provision for subsidy from July 22 to whatever period that we agreed was suitable for the commencement of the total removal.” 

Sylva, who said there is a need to dialogue with the National Assembly noted that the issue of fuel subsidy is a legislative one since the 2022 Appropriation Act provided for subsidy up to June this year, implying that there would not be subsidy from July this year. 

The Senate President, Ahmad Lawan, earlier laid the foundation for the meeting when he recalled his meeting with President Muhammadu Buhari on the possible removal of petroleum subsidy. 

He explained that there is need at one point to do away with subsidy, but the president genuinely feel for Nigerians, particularly the most vulnerable. Even though our economy is growing, but we still have challenge getting better. 

Lawan, therefore, appealed to the organised labour unions to shelve their planned protest, as he noted that the protest was no longer necessary. 

“I am taking this opportunity to speak to the Trade Union Congress (TUC) and Nigerian Labour Congress (NLC) to shelve their plan to go on strike or demonstration. It is totally unnecessary. There is not going to be removal of subsidy, so let us not create unnecessary tension where there should be none.

“Please, forget about the 27th of January deadline. We are supposed to come together and work assiduously to see that our country is stable so that our people enjoy the benefits of government programmes and projects. At the end of the day, whatever decision we would be taking would be in the best interest of our people,” the Senate President said.

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