Barring last minute changes, previous plans by the President Muhammadu Buhari led administration to stop payment of fuel subsidy by June this year, has been cancelled.
This comes as the National Economic Council (NEC) suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration.
Briefing journalists, the Minister of Finance, Budget, and National Planning, Zainab Ahmed explained that NEC concluded in its meeting that it is not a favourable time for the action.
She further explained that the Council agreed on the need to continue the discussion on the matter as well as necessary preparatory work in conjunction with states and representatives of the incoming administration.
The issue of subsidy has been a controversial topic in Nigeria.
Recall that on August 2021 President Muhammadu Buhari signed the Petroleum Industry bill, part of the Act does not create room for subsidy.
Also, in January 2022, the Federal Government proposed 18 months extension to the National Assembly for the implementation of the Petroleum Industry Act (PIA).
The current administration agreed to an extension of the statutory period for the implementation of the removal of subsidy on Premium Motor Spirit (PMS), in line with existing laws.
Ahmed said, “Council agreed that the first subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible mitigated on the lives of ordinary Nigerians.
“So, this will require looking at alternatives to the post subsidy that needs to be planned for and subsequently put in place but also what needs to be done to support the people that would be most affected as a result of the removal.
“So, we will be working together with representatives of the state, we will have a plan that we will start working on putting the building blocks towards the eventual removal of the fuel subsidy.
“If I May remind the forum, that the budget for 2023 has provision for subsidy only up to June 2023 and also the Petroleum Industry Act (PIA) has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the PMs removal and that period is also up to June 2023.”
So, this is a decision that has been taken to expand the committee that is currently working with representatives of the states and it will have to be engaging with labour, will have to be engaging with petroleum marketers.
“The immediate committee just comprises the NNPC, the downstream upstream regulator, as well as the Ministry of Finance, Budget, and National Planning. So, there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process but that there is sufficient consultation taking inputs from key stakeholders into the measures that need to be taken.”
When probed further to explain what she meant when she said “council agreed that timing for removal of fuel subsidy should not be now” and asked if she was saying that fuel subsidy removal had been put on hold, Hajiya Zainab said: “Yes, I did. What I said is that it is not going to be removed now, which means it will not be removed before the transition is completed. But then we’ve have two laws that have inadvertently made the provision that we should exit by June. So, if the committee’s work, which will include the representatives of the incoming administration, determined that the removal can be done by June, then the work plan will be designed to exit as at June.”