The federal government yesterday put on hold its proposed removal of subsidy on petrol.
The minister of finance, budget and national planning, Mr. Zainab Ahmed, announced the decision at the end of the valedictory session of the National Economic Council (NEC) held in the presidential villa, Abuja and presided over by the vice president, Prof Yemi Osinbajo.
The minister who briefed journalists after the meeting said the timing of the subsidy removal should to be deferred, adding that the new administration will address the issue when it comes into power on May 29.
“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.
“So, this will require looking at alternatives to the post-subsidy that needs to be planned for and subsequently put in place and also what need to be done to support the people that would be most affected as a result of the removal.
With the suspension, the country may require another N3.5 trillion to finance the petrol subsidy scheme, which was initially outlawed by the Petroleum Industry Act (PIA) but reinstated by President Muhammadu Buhari.
However, Ahmed said: “Find in your mind that the budget for 2023 has provision for subsidy only up to June and 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.”
The minister also said the federal government was working with other stakeholder towards the eventual removal of the fuel subsidy.
“We agreed to form an expanded committee looking at the process for the removal including determining the exact time and the measures that need to be taken to provide support to the poor and the vulnerable and then also the alternatives that will be put in place, including ensuring that there is 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 will have to be engaging with Labour and with petroleum marketers. The immediate committee comprises the finance ministry, the NNPC, the regulator and the downstream upstream regulator.
“We will be working together with representatives of the states; we will have a plan that we will start working on putting the building blocks towards the eventual removal of the fuel subsidy,” she added.
