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Tuesday, April 16, 2024

Nigerian government postpones planned fuel subsidy removal

Nigerian government postpones planned fuel subsidy removal

The Nigerian government on Monday said it has postponed its proposed plan on subsidy removal from pump price of petrol in July this year.

The country’s members of the national executive council have been sending conflicting signals on the subsidy removal, as minister of state for petroleum, Timipre Sylva quoted President Muhamadu Buhari as having declared that he had no hand in the planned removal.

Of course, it was hard to believe, but Senate president, Ahmad Ibrahim Lawan, joined the drama last week when he said President Buhari told him he never ordered any official to remove the subsidy.

He said lawmakers came under heat from their constituents during the New Year/Christmas recession, pointing out that Nigerians expressed dissatisfaction with the planned removal of the subsidy.

But Lawan still contradicted himself by saying subsidy removal is inevitable as the government will still do it at the right time.

the minister of finance, budget and national planning, Zainab Ahmed, had earlier declared June as the month to end fuel subsidy regime in Nigeria.

The minister said the decision was in line with the dictates of the Petroleum Industry Act (PIA) which emphasises the deregulation of the oil industry.

Change of mind?

Minister Ahmed recounted on Monday, saying the federal government has decided to halt the move until further notice.

She spoke after an emergency meeting with Senate President Lawan in Abuja.

Ahmed, however, said the decision would affect the implementation of the PIA.

Speaking to journalists at the meeting convened by Senator Ahmad, the finance minister said the federal government initially had the plans to remove subsidy on petroleum products from July this year, a reason it made adequate provisions in the 2022 national budget for subsidy payment till June only.

She said: “Provision was made in the 2022 budget for subsidy payment from January till June. That suggested that from July, there would be no subsidy.

“The provision was made sequel to the passage of the Petroleum Industry Act which indicated that all petroleum products would be deregulated. Sequel to 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 (Muhammadu Buhari), 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 roll out of the refining capacities of the existing refineries and the new ones which would reduce amount of products to  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.”

Just a postponement

Senate president, Ahmed Lawan said in line with implementation of PIA, subsidy would eventually be removed but not too soon as earlier projected for July this year.

He said “Recall that last Tuesday I visited the President on the possible removal of subsidy on petroleum products in the country and after my meeting with the President I addressed the press in the Villa.

“Admittedly, the burden is huge and there is need at one point to do away with subsidy but the president genuinely feels for Nigerians particularly the most vulnerable.

“Because of this feeling by the president and most of us in this administration believe that the issue of removal of subsidy should be handled with utmost care, especially, that sufficient planning needs to be done.

“Significant arrangement for absorbing the shock that will come with the removal should be done and the timing is such that the impacts and consequences will not add to hardships.”

Not Buhari’s fault?

Trying to exonerate President Buhari from the planned removal of the subsidy, minister of state for petroleum, Timipre Sylva said the “complete removal is not in our plate at all.”

The minister made the position known while featuring on Channels Television’s News night programme.

He said: “I will tell you categorically that at this moment, the complete removal of subsidy is not on our plate at all.”

“The President of the Federal Republic of Nigeria is not in support of removing subsidy at this time,” Sylva further added.

Like her finance counterpart, he said the federal government needed to tread softly because of the negative impacts subsidy removal would have on Nigerians.

He said: “Of course, we all know that it is a desirable policy direction. Of course, we know that it will have some impacts on the people and that is why we are trying to work out some of those things.

“Until those details are worked out properly with (the organised) labour, and with all the stakeholders in the sector, we will not remove the subsidy. At this moment, it is not on our plate, I can tell you that.

“This is something that needs to be worked out between the federal government and the states because this is a federation issue. We are working with the governors to see how we can continue with this policy direction of subsidising fuel for the foreseeable future.”


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Faruk Khalil
Faruk Khalilhttps://nigeriansketch.com/
Khalil Faruk (Deputy Editor-in-Chief), has a Bachelors and Master's degree in Political Science and has worked as a reporter, features editor and Deputy Editor-in-Chief respectively in a leading Nigerian daily. He has undergone trainings in journalism, photo journalism and online journalism within and outside Nigeria.

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