Home Nigeria Govt: petrol subsidy stays

Govt: petrol subsidy stays

 petrol subsidy
petrol subsidy


Apprehensive Nigerians heaved a sigh of relief yesterday after the government announced a stay of action on petrol subsidy removal.

With this twist, the Federal Government will now make provision for subsidy payment after June, Minister Finance, Budget and National Planning, Mrs Zainab Ahmed, said.

Senate President Ahmad Lawan urged Labour leaders to cancel their planned protests on the subsidy removal.

Mrs. Ahmed said the Federal Government reconsidered the plan due to heightened inflation.

According to her, removing subsidy at this time will impose more hardship on citizens.

President Muhammadu Buhari, she said, “clearly does not want to do that”.

Ahmed said a further amendment will be made to the 2022 budget to provide for subsidy beyond June.

The minister said before subsidy is removed, “a number of measures” will be put in place to cushion the effects.

These include deploying an alternative to petrol and increasing the country’s refining capacity.

Minister of State for Petroleum Resources Timipre Sylva confirmed the government’s position, saying subsidy removal “will not happen”.

He said Nigerians will be protected from the impact of subsidy removal.

Both ministers met with Senate President in Abuja over the subsidy issue.

At the meeting were Senate Leader Yahaya Abdullahi; Deputy Whip Aliyu Sabi Abdullahi; Chief Executive Officer of the Nigerian Midstream and Downstream Regulatory Authority Farouk Ahmed; Nigerian National Petroleum Corporation (NNPC) Managing Director Mele Kyari and Chief Executive Officer of the Nigerian Upstream Regulatory Commission Gbenga Komolafe, an engineer.

Others are 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.

Organised Labour had planned to embark on nationwide protests over the subsidy removal plan.

The National Economic Council (NEC) chaired by Vice President Yemi Osinbajo had recommended an increase in pump price of petrol and announced that the Federal Government would stop subsidy payments in June.

Kyari last November said Nigeria would be out of the subsidy regime in the first quarter of 2022, but that the Federal Government planned to give N5,000 each to 40 million citizens to cushion the effects.

Speaking yesterday, Mrs. Ahmed 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 that has made a 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.

  • November 12, 2021: Finance Minister Zainab Ahmed announced subsidy removal plan and N5,000 palliatives for 40 million Nigerians.
  • December 17, 2021: The NLC announced nationwide protest, rallies plan.
  • December 19, 2021: Labour Minister Chris Ngige said the Federal Executive Council has not authorised subsidy removal.
  • January 5, 2022: Finance minister reaffirmed during budget breakdown that subsidy will be removed in June.
  • January 19, 2022: Senate President Ahmad Lawan said President Buhari never directed that subsidy be removed.
  • January 19, 2022: Information Minister Lai Mohammed said he would seek clarification on the true position of the planned subsidy removal.
  • January 20, 2022: National Economic Council (NEC) said there would be no subsidy on petrol after June.
  • January 24, 2022: Minister of State for Petroleum Timipre Sylva said President Buhari was not in support of subsidy removal.
  • January 24, 2022: Senate President, ministers announced that subsidy stays.

“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 Mr. President clearly does not want to do that.

“What we have to do now is to continue with the discussions, in terms of putting in place a number of measures, one of which is the deployment of an alternative to the Premium Motor Spirit (PMS) and also the rollout of enhanced refining capacity in the country, including the 650,000 barrels per day Dangote refinery and 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 fewer products.

“Also, we are discussing right now within the Executive the possibility of amending the budget.

Read Also: Subsidy: Labour intensifies mobilisation for protests

“We may need to come back to the National Assembly by way of amendment to make additional provisions for fuel subsidy from July 2022 going forward, or to whatever period that is agreed as the right time.

“We are exploring ways and means through discussion with various stakeholders in the executive as well as the civil society and Labour unions to explore ways by which we can address this removal in a manner that is graduated and will have as minimal impact on the citizens as possible.

“We will come back to make further amendments on the fiscal framework as well as in the 2022 budget.”

Sylva added that the removal of subsidy at this time was not on the plate.

“Government is not considering removing subsidy, but there are some legislative issues we need to discuss with the National Assembly,” he said.

Sylva said: “You know that there is a law passed and there are some provisions of the law which we need to tackle.

“We have sat with the National Assembly and we are fully on the same page. Everything boils down to the fact that subsidy removal will not happen.”

On what is wrong with the timing, Sylva said: “You know when you pass a law, it is not cast in stone. In implementing the law, you come across some impediments to implementation. We have to remove those impediments.

“Before subsidy is removed certain things have to be put in place to protect the Nigerian people.

“Have we put all those things in place now? We feel we need some time to put everything in place so that when the subsidy is removed, it will have minimal impact on the suffering people.”

Lawan faulted the timing of the planned subsidy removal.

He said despite the subsidy regime being flawed, sufficient planning must be done before its eventual removal.

He appealed to the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) to shelve the planned protests.

Lawan said: “The position of everyone in government today is that admittedly, subsidy administration and management are flawed because of so many reasons.

“Admittedly, the burden is huge and massive and there is a need at one point to do away with the subsidy.

“Even though our economy is growing, we still have the challenge of getting things to be better for our people.

“A lot of us in this administration believe that the issue of removal of subsidy should be handled with the utmost care, especially that sufficient planning needs to be done.

“Significant arrangements for absorbing the shocks that will come with the removal should be done, that the timing should be such that the impact and consequences will not add to hardship. We all believe in this and Mr. President leads us in this feeling.

“What we are saying is that this is not the time. All of us are of the same opinion and, therefore, there is nothing like confusion or lack of understanding within the government circle.

“We all agree that the subsidy is abused and, therefore, it is a challenge to us as an administration to deal with the abuse, to find appropriate means of stopping it.

“After this meeting, there will be other ones, all in search of ways and means of ensuring that the ordinary Nigerian does not suffer any hardship, that when the subsidy will be removed eventually, it would be at such a point that the hardship will be very minimal and taken care of by several programmes.

“It is not about NLC, we are talking about every Nigerian. We are concerned beyond the Nigerian Labour Congress.

“I am taking this opportunity to appeal to the TUC and NLC to shelve this plan to go on strike or demonstration, it is totally unnecessary.

“There is not going to be a removal of subsidy, so there is no need for this. Please, let’s not create unnecessary tension where there should be none.

“I appeal to them using this medium, to please forget about this January 27, 2022, deadline because there is no need for any deadline.

“We are supposed to come together and work assiduously to ensure that our country is stable, and our people enjoy the benefits of government programmes and projects and that whatever decision would be taken will be in the best interest of our people and protecting the most vulnerable amongst us.”

The All Progressives Congress (APC) applauded the Federal Government for suspending the planned removal of subsidy.

Secretary to the Caretaker/Extra-ordinary Convention Planning Committee (CECPC), Senator John James Akpanudoedehe, in a statement in Abuja, said the decision showed that the welfare of Nigerians was of priority to the Buhari Administration.

“Commendably, the Federal Government took into consideration the fact that the removal of subsidy at this time will heighten inflation and cause undue hardship on the citizenry.

“Programmes and policies of government are meant to benefit the people. So if the timing of the planned subsidy removal would cause hardship on citizens, then a review was necessary.

“We commend President Muhammadu Buhari for always putting the welfare and wellbeing of Nigerians first as he has serially displayed in the implementation of programmes and policies of this administration,” Akpanudoedehe said.

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