The National Economic Council (NEC) presided over by Vice President Yemi Osinbajo has agreed to defer the decision to end fuel subsidy payment by May 29.
Minister of Finance, Budget and National Planning, Zainab Ahmed, who disclosed this, yesterday, said though council okayed the complete removal of subsidy on petroleum products given its unsustainability, it was, however, agreed that the date be shifted to allow more consultations with revenant stakeholders, including representatives of states and the incoming government at the centre on post-subsidy mitigation plans for the masses.
She said: “Council agreed that the fuel 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 programme that needs to be planned for and subsequently put in place to support the people that would be most affected as a result of the removal. 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.”
The minister said 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.
Asked specific measures to be put in place to mitigate the effects of subsidy removal and how the latest decision affects the law on ground, especially the PIA which gave a definite time for the removal of subsidy and the 2023 budget which provides for subsidy until June 2023, she said: “I said we agreed to form an expanded committee that will be looking at the process for the removal, including determining the exact time and also the measures that need to be taken to provide support to the poor and the vulnerable and then also the alternatives that will be put in place, including ensuring that there is sufficient supply of petroleum products in the country.
“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 also have to be engaging with labour, will have to be engaging with petroleum marketers. “
Asked to clarify if fuel subsidy removal has been put on hold, Ahmed said: “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.So if we’re extending beyond June it means we have to revisit the Appropriation Act or amend the PIA. So these are the reasons why we had to do this consultation to get inputs from the governors, they’re going to provide us their representatives to work together with us to have a defined process that will take us towards the removal. But one thing that is clear is everybody agrees that the subsidy should be removed very quickly because the cost is only not efficient but is also not sustainable, and that when the time comes for removal, the removal will be done once and for all.”
She also spoke on the $800 million palliative by the World Bank, saying : We’re hoping that the removal of fuel subsidy, with the savings that removal will cause the federation, which is federal government and state themselves will be able to provide further measures from this increased revenue that will accrue to the federation account.”
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