FG suspends planned petrol subsidy removal

MINISTER of Finance, Budget and National Planning, Zainab Ahmed, and her counterpart in the Ministry of Petroleum Resources, Timipre Sylva, have said the Federal Government is not in a hurry to remove subsidy on petroleum products. 

The duo explained that provision was made for subsidy payment to marketers in the 2022 budget. 

They made the disclosures on Monday at a session with the President of the Senate, Dr Ahmad Lawan, and other principal officers of the Red Chamber. 

The Minister of Finance, Zainab Ahmed, in her submission, said that there was provision for subsidy payment in the 2022 budget till the end of June, declaring that the payment would cease effective from July. 

She said: “Provision was made in the 2022 budget for subsidy payment from January till June. That suggests that from July, there will be no subsidy. The provision was made as a sequel to the passage of the Petroleum Industry Act, which indicated that all petroleum products would be deregulated. 

“Following the passage of the PIA, we went back to amend the fiscal framework to incorporate the subsidy removal. However, after the budget was passed, we had consultations with a number of stakeholders and it became clear that the timing was problematic. We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry. 

“Mr President does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures. One of these include the rollout of the refining capacities of the existing refineries and the new ones, which would reduce amount of products that would be imported into the country. 

“We, therefore, need to return to the National Assembly to now amend the budget and make additional provision for subsidy from July 22 to whatever period that we agreed was suitable for the commencement of the total removal.” 

Sylva, who said there is a need to dialogue with the National Assembly noted that the issue of fuel subsidy is a legislative one since the 2022 Appropriation Act provided for subsidy up to June this year, implying that there would not be subsidy from July this year. 

The Senate President, Ahmad Lawan, earlier laid the foundation for the meeting when he recalled his meeting with President Muhammadu Buhari on the possible removal of petroleum subsidy. 

He explained that “there is need at one point to do away with subsidy, but the president genuinely feel for Nigerians, particularly the most vulnerable. Even though our economy is growing, but we still have challenge getting better.” 

Lawan, therefore, appealed to the organised labour unions to shelve their planned protest, as he noted that the protest was no longer necessary. 

“I am taking this opportunity to speak to the Trade Union Congress (TUC) and Nigerian Labour Congress (NLC) to shelve their plan to go on strike or demonstration. It is totally unnecessary. There is not going to be removal of subsidy, so let us not create unnecessary tension where there should be none. 

“Please, forget about the 27th of January deadline. We are supposed to come together and work assiduously to see that our country is stable so that our people enjoy the benefits of government programmes and projects. At the end of the day, whatever decision we would be taking would be in the best interest of our people.” 

Meanwhile, a Senior Advocate of Nigeria (SAN), Mr Femi Falana, on Monday rallied Nigerians into a resistance movement being built by the civil society against the planned hike of petrol pump price by President Muhammadu Buhari administration. 

In a statement, the interim chair of advocacy group, the Alliance on Surviving COVID and Beyond (ASCAB), Falana, assured that the planned removal of the controversial subsidy on petrol, whenever it is done, would be met with scorched-earth response by the civil populace. 

He said warning rallies are now scheduled to hold nationwide on Thursday and next Tuesday. 

Speaking on the alleged criminality and official inaction responsible for the planned hike, Falana said: “Having failed to fast-track the implementation of the autogas project, the Buhari administration has concluded plans to increase the price of PMS notwithstanding its reverberating effect on the cost of goods and services in the country. 

“Another justification for increase is that it will curb the smuggling of fuel from Nigeria to neighbouring countries. The implication is that the people of Nigeria are being punished for the criminal activities of smugglers. 

“Since the actions of the Federal Government cannot be justified, we are therefore compelled to call on the economically-marginalised Nigerian people to participate in the rallies scheduled to hold throughout the country on January 27 and February 1, 2022 at the instance of the Nigeria Labour Congress and Trade Union Congress as well as the progressive extraction of Civil Society Organisations. 

“The victims of the neoliberal economic policies of the Federal Government have nothing to lose but their chains. 

“Instead of supporting the planned increase in the price of fuel to N302 per litre, the Nigerian Governors Forum ought to adopt measures to end the alleged smuggling of over 60 million litres per day. 

“However, since the rallies are designed to warn the Federal Government to stop further provoking the Nigerian people, it is hoped that all anti-peoples economic policies will be jettisoned in the public interest. Otherwise, the regime should be prepared for a popular uprising if it goes ahead to remove the so-called full subsidy or under recovery in June 2022 or thereafter.” 

To prove that policy failure on the part of the Buhari administration is mainly responsible for the malady in the sector, he alluded to various pronouncements and actions of senior officials of the central government. 

Falana recalled, “In a well attended press conference held in Abuja on January 16, 2020, the Minister of State, Ministry of Petroleum Resources, Mr. Timipre Sylva, disclosed that the Federal Government had adopted Compressed Natural Gas (CNG) as an alternative to Premium Motor Spirit (PMS). 

“In justifying the official policy, the minister said that CNG would crash the cost of transportation and play a crucial role in eliminating the huge burden of subsidy payment as it would be sold at between N95 and N97 per litre unlike PMS that was then selling at N145 per litre. 

“But due to lack of the necessary infrastructure and high cost of gas, the autogas plan of the Buhari administration has not taken off. Hence, the Federal Government decided to remove the so-called subsidy and announced the plan to distribute N5,000 transport allowance to 40 million poor citizens. The suggestion that the huge fund be spent on fixing the nation’s comatose refineries has been ignored.” 

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However, the All Progressives Congress (APC) has commended the Federal Government for halting the proposed fuel subsidy removal. 

The national secretary of the APC Caretaker/ Extraordinary Convention Planning Committee, Senator John James Akpanudoedehe, in a statement said the action of the President Muhammadu Buhari administration was commendable, as he noted that it was meant to save Nigerians unnecessary economic agony. 

The statement reads: “The All Progressives Congress (APC) welcomes the Federal Government’s suspension of the planned removal of subsidy on petroleum products. Commendably, the Federal Government took into consideration the fact that the removal of subsidy at this time will heighten inflation and cause undue hardship on the citizenry.” 

In another development, the National Union of Road Transport Workers (NURTW) has condemned the proposal from the Federal government to increase the pump price of Premium Motor Spirit (PMS) popularly known as petrol in the second quarter of 2022. 

Speaking after a National Administrative Council (NAC) meeting of the union on Monday in Abuja, the president of the union, Tajudeen Ibikunle Baruwa, said the proposed increase of fuel price will devastate the Nigerian economy. 

He said, “The NAC meeting considered that the intended increase in the pump price of petrol is ill-timed and insensitive to the appalling suffering, hardship and hunger that Nigerians are currently facing, occasioned by the harsh economic situation in the country.” 

Meanwhile, the Pan Yoruba socio-political organisation, Afenifere, has condemned the decision of the Federal Government to postpone the removal of fuel subsidy, saying it was hypocrisy on the part of the Buhari-led government. 

The national publicity Secretary of Afenifere, the Pan Yoruba socio-political organisation, Comrade Jare Ajayi, said that it is unfortunate that Nigerians are still talking of fuel subsidy six years into the administration of President Muhammadu Buhari. 

According to Afenifere spokesman, Buhari and his political party, the APC, told Nigerians when campaigning to be voted into power that fuel subsidy was a scam. 

It said the government promised to do away with it if voted into power. 

It noted that beyond that, the party and its candidates promised to revamp the then comatose petroleum refineries but that over six years after the party came to power, the amount being taunted for subsidy has gone up considerably while none of the four refineries in the country is working. 

Afenifere maintained that Nigerians are not impressed by the government’s decision to postpone the subsidy removal till further notice. 

It did so not necessarily because it loves Nigerians but because of the undisguised resolve of the people to resist such unhelpful step.