Minister of State for Petroleum Resources, Timipre Sylva, on Tuesday clarified that the Federal Government would extend the fuel subsidy regime to July 2023, pending when amendments in the Petroleum Industry Act will be forwarded to the National Assembly and subsequently signed by the President
The minister gave this hint while interacting with State House Correspondents at the Presidential Villa in Abuja.
Specifically, Sylva confirmed that President Muhammadu Buhari, being aware of the negative implications of total subsidy removal, had approved that the fuel subsidy regime time frame be extended, to allow the government put necessary palliatives in place.
He listed some of the steps to be taken as including the full rehabilitation of the nation’s refineries even as the multi-billion Naira Dangote Refinery project is expected to become operational from the third quarter of this year.
It would be recalled that following her interaction with the leadership of the National Assembly on Monday, the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, had disclosed that government would no longer stop fuel subsidy as earlier scheduled at the end of the second quarter this year due to the socio-economic implications of the fiscal policy for the citizenry.
The Minister maintained that the Federal Government was not in a hurry to remove the contentious subsidy on Petroleum products as provision was made for subsidy payment to marketers in the 2022 budget.
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 a 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 the amount of products that would 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”, the minister added.
Commenting on the contentious fiscal regime, the Senate President, Ahmad Lawan, earlier during the meeting recalled his meeting with President Muhammadu Buhari on the possible removal of petroleum subsidy.
The lawmaker said: “There is need at one point to do away with subsidy but the President genuinely feel for Nigerians particularly the most vulnerable. Even though our economy is growing but we still have challenge getting better.
“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 to provide necessary palliatives”, he maintained.
Meanwhile, the Nigeria Labour Congress (NLC) has described government’s plan to sustain fuel subsidy as a welcomed development.
The Congress advised the Federal Government to re-open discussions with organised labour in order to find mutually acceptable solutions to the sundry challenges in the downstream sub-sector of the hydrocarbon resources industry.
The NLC President, Comrade Ayuba Wabba, made this appeal in a letter jointly signed by the General Secretary of the congress, Mr. Emmanuel Ugboaja and addressed to state governors.
