For the second time since the passage of the Petroleum Industry Act (PIA), the Muhammadu Buhari-led administration has suspended the planned removal of subsidy on petrol.
At a post National Economic Council meeting on Thursday, Minister of Finance, Budget and National Planning, Zainab Ahmed said the council has concluded that petrol subsidy will not be removed as earlier planned for June 2023.
“Council agreed that the timing of the removal of fuel subsidy should not be now. But that we should continue with all of the preparatory works that need to be done and that this preparatory has to be done in consultation with the states and other key stakeholders including representatives of the incoming administration.
“Council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. But we have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians,” the finance minister said.
Shortly after the passage of the PIA in 2022, President Buhari had directed that the oil subsidy be kept on hold until all stakeholders were carried along on the issue as well as ensuring that all machineries are in place to end the subsidy regime. The aim was come up with a palliative to cushion the effect of subsidy removal.
Speaking after the valedictory council meeting that was presided over by Vice President Yemi Osinbajo at the Council Chambers of the Presidential Villa in Abuja, Ahmed said the current federal administration, subnational governments and representatives of the incoming administration, require more preparatory work.
Ahmed said the new plan will require looking at alternatives to the fuel subsidy that needs to be planned for and subsequently put in place. But also, what needs to be done to support the people that will be most affected as a result of the removal.
She said government have a plan that it will soon start working on, putting the building blocks towards the eventual removal of the first subsidy.
“And if I may remind this forum that the budget for 2023 has a provision for fuel subsidy only up to June 2023 and also the Petroleum Industry Act has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the PMS removal and that that period is also up to June 2020,” the minister said.
