FG suspends planned removal of subsidy on petroleum products

The National Economic Council (NEC) has suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration.

Minister of Finance, Budget and National Planning, Ahmed Zaniab gave the indication on Thursday, shortly after the NEC meeting, chaired by Vice President Yemi Osinbajo.

She said the NEC, which comprises State Governors deliberated on the issue extensively and came to the conclusion that it will not be wise to remove subsidy as soon as the new administration is trying to settle down to governance.

According to her, this will include determining the exact time for the removal, the measures that need to be taken to provide support to the poor and the vulnerable and the alternatives that will be put in place.

Mrs. Ahmed said that the committee would also look at measures to ensure that there was sufficient supply of petroleum products in the country.

“So this is a decision that has been taken to expand the committee that is currently working with representatives of the states and it is also will have to be engaging with labour will have to be engaging with petroleum marketers.

“The immediate committee is just comprising the initial finance, the NNPC, the regulator, the downstream upstream regulator, as well as the as the Minister of Finance budget, a national plan.

“So, there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process; that there is sufficient consultation taking inputs from key stakeholders into the measures that need to be taken.”

Insisting that the subsidy on petrol would not be removed before the transition to the next administration is completed, Ahmed said that two extant laws in the country already have provisions for the removal of subsidy.

“What I said is that it is not going to be removed now, which means it will not be removed before the transition is completed.

“That’s what it means, but then we’ll have two laws that have inadvertently made the provision that we should exit by June.

“So if the committee’s work, which will include the representatives of the incoming administration, determined that the removal can be done by June, then, the work plan will be designed to exit as at June.

“But if the determination is that the period needs to be extended, it will mean that we, as a country, will have to revisit the Appropriation Act for example, because the 2023 Budget only made provision up to June.

“So, if we’re extending beyond June it means we have to revisit the Appropriation Act and do a supplementary or amend the law and also the PIA,” Ahmed explained.

The minister said that the consultation with governors at the meeting of the National Economic Council became necessary to enable government get the inputs from the sub-national governments on the issue of subsidy removal.

“One thing that is clear is everybody agreed that the subsidy should be removed very quickly because the cost is not only not efficient it is also not sustainable, and that when the time comes for removal, the removal will be done once and for all,” she said.

While stating that the Council agreed that the removal of subsidy is inevitable, Mrs. Ahmed said measures must be put in place to mitigate the impact on Nigerians.