FG shelves planned petrol subsidy removal ‘till further notice’

Federal Government has announced the suspension of the planned petrol subsidy removal.

Federal Government had planned to effect removal of the subsidy from Premium Motor Spirit (petrol) on the grounds that funds will be saved for capital projects, in addition to reducing high recurrent expenditure.

Minister of Finance, Budget and National Planning, Zainab Ahmed, who made the disclosure, Monday, while speaking during a meeting held at the National Assembly in Abuja, added that the plan to remove petrol subsidy by the third quarter of 2022 has been shelved ‘till further notice.’

The development comes as labour unions in the country have already perfected plans to stage mass protests across the country over the decision by the Federal Government to remove the subsidy.

The Nigeria Labour Congress (NLC) and its sister group, the Trade Union Congress (TUC) in alliance with civil society organisations (CSOs) had planned to move against the government’s decision.

The planned mass protest was also joined by the Alliance on Surviving COVID and Beyond, a group led by lawyer Mr Femi Falana SAN, which had called on Nigerians to join the planned nationwide protest against the removal of petrol subsidy.

The nationwide rallies are scheduled to take place on January 27 and February 1 respectively.

In a statement, Falana said the Nigerian Government lacked justification for the planned hike in petrol price.

The group said the government should have concentrated on tackling the menace of petrol smuggling in the country and ensuring the success of the compressed natural gas initiative.

ASCB also threatened to mobilise for mass action in the country if government decided to remove fuel subsidy.

“The Federal Government decided to remove the so-called subsidy and announced plans to distribute N5,000 transport allowance to 40 million poor citizens. The suggestion that the huge fund be spent on fixing the nation’s comatose refineries has been ignored.

“Having failed to fast-track the implementation of the autogas project, the Buhari administration has concluded plans to increase the price of PMS notwithstanding its reverberating effect on the cost of goods and services in the country.

“Another justification for the increase is that it will curb the smuggling of petrol from Nigeria to neighbouring countries. The implication is that the people of Nigeria are being punished for the criminal activities of smugglers.

“Since the actions of the Federal Government cannot be justified, we are therefore compelled to call on the economically marginalised Nigerian people to participate in the rallies scheduled to hold throughout the country on January 27 and February 1, 2022 at the instance of the Nigeria Labour Congress and Trade Union Congress as well as the progressive extraction of civil society organisations. The victims of the neoliberal economic policies of the Federal Government have nothing to lose but their chains.

“Instead of supporting the planned increase in the price of fuel to N302 per litre, the Nigerian Governors Forum ought to adopt measures to end the alleged smuggling of over 60 million litres per day.

“However, since the rallies are designed to warn the Federal Government to stop further provoking the Nigerian people, it is hoped that all anti-people’s economic policies will be jettisoned in public interest.

“Otherwise, the regime should be prepared for a popular uprising if it goes ahead to remove the so-called full subsidy.”

Cracks in the walls of government’s decision to remove subsidy appeared when earlier, last week,

When both Minister of State for Petroleum, Timipre Sylva, and the senate President, Ahmad Lawan, said President Muhammadu Buhari, never authorised the removal of subsidy from petrol.

“I will tell you categorically that at this moment, the complete removal of subsidy is not on our plate at all,” said Sylva, adding: “The President of the Federal Republic of Nigeria is not in support of removing subsidy at this time.”

The Minister stated that part of the reason why the Federal Government is not thinking about removing fuel subsidy is because of the impact it will have on Nigerians.

“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.”

On his part, Senate President, Ahmad Lawan, earlier last Tuesday, while speaking to newsmen had assured Nigerians that petroleum subsidy would not be removed for now.

According to him, President Muhammadu Buhari has not authorised anybody to remove fuel subsidy as speculated in social and conventional media outfits.

Meanwhile, a group, the Integrity Youth Alliance, a Civil Society Organisation had urged the Senate leadership to be decisive on the proposed removal of subsidy on Premium Motor Spirit (PMS) popularly called Petrol.

It said that footdragging on the subsidy removal was akin to postponing the obvious when the nation’s oil corporation had become true business conglomerate expected to make returns to shareholders.

Board Chairman of the Group, Mr Adewole Kehinde, in a statement, last Wednesday, said that the Petroleum Industry Act (PIA) had already made fuel subsidy payment an issue of Law.

The board chairman, however, noted that the Petroleum Industry Act did not make provision for subsidy payment as it provided that by the end of July 2022, the nation should be out of the subsidy regime.

“For the purpose of clarification, the Act establishes incorporated joint companies under Section 65 of the Act.

“The NNPC Limited is to conduct its affairs on a commercial basis in a profitable manner without recourse to government funds and their Memorandum and Articles of Association shall state these restrictions.

“The NNPC is also required to declare dividends to its shareholders and retain 20 per cent of profit as retained earnings to grow its business like any other incorporated entity incorporated under the Companies and Allied Matters Act, as provided under Section 53(7) of the  Act.

“The downstream deregulation through the Act will bring about liberalisation of the sector, which would make it possible for all petroleum products marketers to source their products from anywhere and sell at any price dictated by prevailing market forces.

“The competition arising from that would have helped to force pump prices down to the benefit of the citizens,” Kehinde said.

He noted that Petrol subsidy removal would free revenues for the government to provide essential services and at the same time boost investments in the downstream sector.

According to him,  the benefits of fuel subsidy removal are huge.

He said with removal, operators would have the opportunity to recover their costs, and in the long run, investments would receive massive boost and more jobs would be created.

Kehinde added that resisting deregulation under the guise of fighting for the welfare of Nigerians was only an attempt to hoodwink Nigerians into believing that they could eat their cake and still have it.

“Therefore, rather than subscribing to this deceptively populist course of action, the leadership of the National Assembly should toe the path of genuine patriotism with which it has long been associated by embracing, promoting and supporting new progressive reform embedded in the PIA.

“That is the surest way of eliminating the rot that has clogged the road to development in our petroleum sector,” he noted.