TECHNOCRAT MEDIA, Abuja
The federal government has announced the postponement of the planned petrol subsidy removal till further notice due to “high inflation rate and economic hardship”.
The plan of the federal government to remove fuel subsidies has caused reactions among Nigerians, with the Nigeria Labour Congress having scheduled a plan to embark on a national strike if the proposed plan to implement removal of fuel subsidy is implemented.
Ms Zainab Ahmed, minister of finance had in November 2021 announced that fuel subsidy would be replaced with an N5000 monthly transport allowance for Nigerians in 2022.
In what could be described as a U-turn, Mrs Zainab Ahmed, minister of finance, budget, national planning, again disclosed at a meeting with Senate President Ahmad Lawan on Monday in Abuja that the plan had been postponed.
The Senate President, Ahmad Lawan had said last week that President Buhari who is the substantive minister of petroleum did not order petrol subsidy removal. He added that Nigerians were raising concerns over the policy.
Also last week, the National Economic Council (NEC) said it is yet to make a decision as members of the council proposed full deregulation which is to push a litre of petrol to N302.
Mrs Ahmed further explained that petrol subsidy was captured in the 2022 budget which is to run from January to June.
The finance minister, however, said that after consultations with stakeholders — in view of the high inflation and economic hardship — additional provisions would be made beyond the initial period.
According to the minister, it has become clear that the timing for the removal of the petrol subsidy will be problematic as the country still experiences heightened inflation.
“Provision was made in the 2022 budget for subsidy payment from January till June. That suggested that from July, there would be no subsidy,” Ahmed said.
”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 number 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 the subsidy from July 2022 to whatever period that we agreed was suitable for the commencement of the total removal.”
Reacting, the Senate President appealed to the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to shelve their planned industrial action over subsidy removal as it has become unnecessary.