The minister of state for petroleum resources, Mr. Timipre Sylva, yesterday proposed an 18-month delay in implementation of the Petroleum Industry Act (PIA) to enable it to continue with the payment pay of subsidy.
Recall that the federal government made provision for petrol subsidy in the 2022 budget only up till June with the hope that the PIA will become fully operational by then.
The minister said while addressing journalist at the presidential villa, Abuja that the decision was reached as a result of President Mohammadu Buhari’s insistence that all the necessary structures must be put in place to caution the effect of the subsidy removal.
He added that the president had approved the suspension of the removal of fuel subsidy until further notice.
The minister said the government would continue to engage the leadership of the organised Labour who had insisted that the proposed nationwide protest on January 27 against the subsidy removal would still go ahead.
“President Muhammadu Buhari has, following engagements with stakeholders, agreed to an extension of the statutory period for the implementation of the removal of subsidy on Premium Motor Spirit (PMS), in line with existing laws.
“The new Petroleum Industry Act (PIA) provides for the unrestricted market pricing for PMS from the effective date.
“However, the PIA also envisaged the potential for supply disruption with its resultant effect on the economy.
“Consequently, it provides for a window of six months from the effective date for government to request the services of NNPC Limited as a supplier of last resort.
“This is to forestall supply disruptions and guide market readiness preparatory to migration to the deregulated pricing regime.
“With assent by the president on August 16, 2021, the PMS subsidy removal was therefore expected to take place effective February 16, 2022.
“However, following extensive consultations with all key stakeholders within and outside the government, it has been agreed that the implementation period for the removal of the subsidy should be extended.
“This extension will give all the stakeholders time to ensure that the implementation is carried out in a manner that ensures all necessary modalities are in place to cushion the effect of the PMS subsidy removal, in line with prevailing economic realities.
“The president assures that his administration will continue to put in place all necessary measures to protect the livelihoods of all Nigerians, especially the most vulnerable,” the minister said.
He clarified that the government the government does not “intend to remove subsidy now.”
“We also see the legal implication. There is six months provision in the PIA which will expire in February, and that is why we are coming out to say that before the expiration of this time, as I said earlier, we will engage the legislature.
“We believe that this will go to the legislature. We are applying for amendment of the law so that we would still be within the law.
“We are proposing an 18-month extension but what the National Assembly is going to approve is up to them.
“We would approve an 18-month extension and then it is up to the National Assembly to look at it and pass the amendment as they see it.
“Somebody mentioned here the possibility of gradual increase. That is not on the table. Gradual or increment in whatever guise is not on the table.
“We are going to see how to revive the law. This is not going to be the only amendment to the PIA. A few months ago, the president already proposed an amendment to the law.”
Before petrol subsidy is finally withdrawn, the minister said the refineries would be rehabilitated in addition to introduction of alternate fuel vehicles and provision of palliatives.
“All those structures are not right now in place. One of those is to ensure that the refineries are working and you’re all aware that steps are being taken for all the refineries to be functional very soon. The Dangote Refinery is expected to come on stream at the end of this year. The Port Harcourt refinery is expected to be performing at a certain capacity, not full capacity, by end of this year. There are some modular re- fineries that are also going to come on stream later this year.
“Also, there is a discussion of introducing an alternate fuel for cars in the form of auto gas and somebody asked what has happened since launching. A lot has gone on there. In fact, even today, if you had noticed, I briefed Mr. President on the progress that had been made on auto gas. We are hoping that in March or April, the conversion processes will begin.
“We promised that one million cars would be converted initially, and of course, the corresponding amount of gas filling stations will also be built. That is in progress, and I want to assure you that it will happen very soon. That also has to be in place before we say okay we want to take out subsidies.
“We’re also looking at palliatives. So, because all these have to converge before we announce the complete removal of subsidy, because Mr. President especially wants us to ensure that this doesn’t have too much impact on the people, we are now extending the time for subsidy removal.”
