Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said yesterday that the Federal Government has suspended removal of fuel subsidy. She said the government had made provisions for subsidy in the 2022 budget from January to June this year, adding that government will forward a request to the National Assembly to make additional provisions for fuel subsidy from July this year till a time deemed appropriate for its eventual removal.
In this report's, According to Minister of Finance, all payments on fuel subsidy ordinarily would cease as from July, 2022. The minister spoke as the Senate President, Ahmad Lawan, pleaded with the Nigerian Labour Congress, NLC, and Trade Union Congress, TUC, to shelve the planned strike schedule for Thursday nationwide against fuel subsidy removal. The NLC, however, insisted yesterday that the planned strike would go on, saying it will not believe government until the suspension of subsidy was effected.
The union also petitioned the Nigerian Governors Forum, NGF, giving reasons for insisting on the scheduled protest. However, Mrs Ahmed, who disclosed this at a meeting with the Senate President, Ahmad Lawan, at the National Assembly complex in Abuja, observed that in view of the timing which is problematic, the Federal Government decided to suspend its plan to go ahead with the removal of subsidy on petroleum products in July, particularly against the backdrop of outcomes from ongoing consultations.
She added that the Federal Government is exploring alternatives to premium motor spirit as well as pushing to step-up the country’s crude oil refining capacity. Ahmed, in company of the Minister of State for Petroleum Resouces, Mr. Timipre Sylva, disclosed that efforts are also underway by the executive arm of government to forward a request to the National Assembly to make additional provision for fuel subsidy from July this year till a time deemed appropriate for its eventual removal.
Also at the meeting were Senate Leader, Yahaya Abdullahi and the Deputy Whip, Aliyu Sabi Abdullahi, CEO of the Nigerian Midstream and Downstream Regulatory Authority, Farouk Ahmed, Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, and CEO of the Nigerian Upstream Regulatory Commission, Engr. Gbenga Komolafe.Others include the Special Assistant to the President on Natural Resources, Habib Nuhu, Permanent Secretary, Federal Ministry of Finance, Aliyu Shehu Shinkafi, and Permanent Secretary, Ministry of Petroleum Resources, Nasir Sani-Gwarzo.
The Minister of Finance, Mrs Ahmed added, she said. Let me start by stating the fact that we did make a provision in the 2022 budget for fuel subsidy from January to June. And that suggests that from July, there would be no fuel subsidy. This provision was made sequel to the passage of the Petroleum Industry Act, PIA, that has made provision that all products will be deregulated. Subsequent to the passage of the Act, we went back and amended the Fiscal Framework that was submitted to the National Assembly to incorporate this demand, but after the budget was passed, we have had consultations with a number of stakeholders.
She continue by saying that, it became clear that the timing is problematic, that practically, there is still heightened inflation, and also removal of subsidy will further worsen the situation, thereby, imposing more difficulties on the citizens, and the President clearly does not want to do that. What we have to do now is to continue with the discussions we are making, in terms of putting in place a number of measures, one of which is the deployment of an alternative to Premium Motor Spirit, PMS, and also the roll-out of enhanced refining capacity in the country, including the 650,000 barrels per day Dangote Refinery and also the rehabilitation of the four national refineries that have a combined capacity of 450,000 barrels per day.
The increased refining capacity in the country means we will need to import less products. But also as we are discussing right now within the Executive the possibility of amending the budget, we may need to come back to the National Assembly by way of amendment to make additional provision for fuel subsidy from July, 2022, going forward, or to whatever period that is agreed as the right time.
Also, while we are exploring ways and means through discussions with various stakeholders in the executive as well as the civil societies and labour unions by which we can address this removal in a manner that is graduated and will have as minimal impact on the citizens as possible.!!
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