Apprehensive Nigerians heaved a sigh of relief yesterday after the government announced a stay of action on petrol subsidy removal.
With this twist, the Federal Government will now make provision for subsidy payment after June, Minister Finance, Budget and National Planning, Mrs Zainab Ahmed, said.
Senate President Ahmad Lawan urged Labour leaders to cancel their planned protests on the subsidy removal.
Mrs. Ahmed said the Federal Government reconsidered the plan due to heightened inflation.
According to her, removing subsidy at this time will impose more hardship on citizens.
President Muhammadu Buhari, she said, “clearly does not want to do that”.
Ahmed said a further amendment will be made to the 2022 budget to provide for subsidy beyond June.
The minister said before subsidy is removed, “a number of measures” will be put in place to cushion the effects.
These include deploying an alternative to petrol and increasing the country’s refining capacity.
Minister of State for Petroleum Resources Timipre Sylva confirmed the government’s position, saying subsidy removal “will not happen”.
He said Nigerians will be protected from the impact of subsidy removal.
Both ministers met with Senate President in Abuja over the subsidy issue.
At the meeting were Senate Leader Yahaya Abdullahi; Deputy Whip Aliyu Sabi Abdullahi; Chief Executive Officer of the Nigerian Midstream and Downstream Regulatory Authority Farouk Ahmed; Nigerian National Petroleum Corporation (NNPC) Managing Director Mele Kyari and Chief Executive Officer of the Nigerian Upstream Regulatory Commission Gbenga Komolafe, an engineer.
Others are the Special Assistant to the President on Natural Resources, Habib Nuhu; Permanent Secretary, Federal Ministry of Finance, Aliyu Shehu Shinkafi, and Permanent Secretary, Ministry of Petroleum Resources, Nasir Sani-Gwarzo.
Organised Labour had planned to embark on nationwide protests over the subsidy removal plan.
The National Economic Council (NEC) chaired by Vice President Yemi Osinbajo had recommended an increase in the pump price of petrol and announced that the Federal Government would stop subsidy payments in June.
Kyari last November said Nigeria would be out of the subsidy regime in the first quarter of 2022, but that the Federal Government planned to give N5,000 each to 40 million citizens to cushion the effects.
Speaking yesterday, Mrs. Ahmed said: “Let me start by stating the fact that we did make a provision in the 2022 budget for fuel subsidy from January to June. And that suggests that from July there would be no fuel subsidy.
“This provision was made sequel to the passage of the Petroleum Industry Act that has made a provision that all products will be deregulated.
“Subsequent to the passage of the Act, we went back and amended the Fiscal Framework that was submitted to the National Assembly to incorporate this demand, but after the budget was passed, we have had consultations with a number of stakeholders.
- November 12, 2021: Finance Minister Zainab Ahmed announced subsidy removal plan and N5,000 palliatives for 40 million Nigerians.
- December 17, 2021: The NLC announced nationwide protest, rallies plan.
- December 19, 2021: Labour Minister Chris Ngige said the Federal Executive Council has not authorised subsidy removal.
- January 5, 2022: Finance minister reaffirmed during budget breakdown that subsidy will be removed in June.
- January 19, 2022: Senate President Ahmad Lawan said President Buhari never directed that subsidy be removed.
- January 19, 2022: Information Minister Lai Mohammed said he would seek clarification on the true position of the planned subsidy removal.
- January 20, 2022: National Economic Council (NEC) said there would be no subsidy on petrol after June.
- January 24, 2022: Minister of State for Petroleum Timipre Sylva said President Buhari was not in support of subsidy removal.
- January 24, 2022: Senate President, ministers announced that subsidy stays.
“It became clear that the timing is problematic, that practically, there is still heightened inflation, and also removal of subsidy will further worsen the situation, thereby, imposing more difficulties on the citizens, and Mr. President clearly does not want to do that.
“What we have to do now is to continue with the discussions, in terms of putting in place a number of measures, one of which is the deployment of an alternative to the Premium Motor Spirit (PMS) and also the rollout of enhanced refining capacity in the country, including the 650,000 barrels per day Dangote refinery and the rehabilitation of the four national refineries that have a combined capacity of 450,000 barrels per day.
“The increased refining capacity in the country means we will need to import fewer products.
“Also, we are discussing right now within the Executive the possibility of amending the budget.
“We may need to come back to the National Assembly by way of amendment to make additional provisions for fuel subsidy from July 2022 going forward, or to whatever period that is agreed as the right time.
“We are exploring ways and means through discussion with various stakeholders in the executive as well as the civil society and Labour unions to explore ways by which we can address this removal in a manner that is graduated and will have as minimal impact on the citizens as possible.