The Minister of Finance, Budget, and National Planning, Zainab Ahmed, has said the Federal Government has suspended its plan to remove fuel subsidy.
Ahmed stated this in a meeting with the Senate President, Ahmad Lawan, at the National Assembly complex in Abuja. She noted that all payments on fuel subsidy would cease from July 2022.
The minister stressed that from January to June, the government had made provisions for subsidy in the 2022 budget. She added that the government will forward a request to the National Assembly to seek additional provisions for fuel subsidy from July to a convenient time before it is eventually removed.
Ahmed’s statement follows a request by the Senate President, Ahmad Lawan, to the Nigerian Labour Congress, NLC, and Trade Union Congress, TUC, to put off their planned industrial strike action scheduled nationwide for Thursday against the removal of fuel subsidy.
However, the NLC has said it will not suspend its planned strike until the government suspends the subsidy.
The union also petitioned the Nigerian Governors’ Forum, NGF, giving reasons for insisting on the scheduled protest.
However, the minister further disclosed that the Federal Government has decided to suspend subsidy removal plans in July, particularly against the backdrop of outcomes from ongoing consultations.
She revealed that the Federal Government is looking out for other measures to the premium motor spirit and stepping up crude oil refining capacity.
Speaking further, Ahmed said the executive arm of government is planning on forwarding a request to the National Assembly to make other provisions for fuel subsidy from July this year till a time deemed appropriate for its eventual removal.
According to her: “Let me start by stating the fact that we did make a provision in the 2022 budget for fuel subsidy from January to June. And that suggests that from July, there would be no fuel subsidy.
“This provision was made sequel to the passage of the Petroleum Industry Act, PIA, that has made provision that all products will be deregulated.“Subsequent to the passage of the Act, we went back and amended the Fiscal Framework that was submitted to the National Assembly to incorporate this demand, but after the budget was passed, we have had consultations with a number of stakeholders.
“It became clear that the timing is problematic, that practically, there is still heightened inflation, and also removal of subsidy will further worsen the situation, thereby, imposing more difficulties on the citizens, and the President clearly does not want to do that.“What we have to do now is to continue with the discussions we are making, in terms of putting in place a number of measures, one of which is the deployment of an alternative to Premium Motor Spirit, PMS, and also the roll-out of enhanced refining capacity in the country, including the 650,000 barrels per day Dangote Refinery and also the rehabilitation of the four national refineries that have a combined capacity of 450,000 barrels per day.
“The increased refining capacity in the country means we will need to import less products. But also as we are discussing right now within the Executive the possibility of amending the budget, we may need to come back to the National Assembly by way of amendment to make additional provision for fuel subsidy from July, 2022, going forward, or to whatever period that is agreed as the right time.
“Also, while we are exploring ways and means through discussions with various stakeholders in the executive as well as the civil societies and labour unions by which we can address this removal in a manner that is graduated and will have as minimal impact on the citizens as possible.
“So, we will come back to make further amendments on the fiscal framework as well as in the 2022 budget.”
Others present at the meeting were Senate Leader, Yahaya Abdullahi, and the Deputy Whip, Aliyu Sabi Abdullahi, CEO of the Nigerian Midstream and Downstream Regulatory Authority, Farouk Ahmed, Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari, and CEO of the Nigerian Upstream Regulatory Commission, Engr. Gbenga Komolafe.Others include the Special Assistant to the President on Natural Resources, Habib Nuhu, Permanent Secretary, Federal Ministry of Finance, Aliyu Shehu Shinkafi, and Permanent Secretary, Ministry of Petroleum Resources, Nasir Sani-Gwarzo.