Fuel subsidy removal put on hold

Despite spending over N10 trillion in less than two years and opting for a loan of $800 million as palliative, the Federal Government, in a volte-face, made a joke of its initial plan to remove petrol subsidy when it yesterday, put the plan on hold barely a month to the proposed June take-off.

 
The National Economic Council (NEC), presided over by Vice President Yemi Osinbajo, on Thursday, said the timing of the subsidy removal should not be now, adding that the new administration will address the contentious matter when it comes on stream May 29.
 
Briefing newsmen after their valedictory session in the State House, Abuja, Minister of Finance, Budget and National Planning, Zainab Ahmed, said: “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 needs to be done to support the people that would be most affected as a result of the removal.
 
“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.
 
“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.

 
“We will be working together with representatives of the state, we will have a plan that we will start working on putting the building blocks towards the eventual removal of the fuel subsidy.”
 
Recall that the Minister of State for Budget and National Planning, Clem Agba, had last month, disclosed that the Federal Government was yet to harmonise its efforts with states to provide palliatives to cushion the effect of subsidy removal.
 
According to him, a committee led by the Vice President and NEC, comprising governors, the governor of Central Bank of Nigeria (CBN) and other co-opted government officials, had been working to resolve the issue for over 12 months with no clear roadmap on the issue.
 
With yesterday’s suspension, the country may require another N3.5 trillion to finance the Premium Motor Spirit (PMS) subsidy scheme, which was initially outlawed by the Petroleum Industry Act (PIA) but reinstated by President Muhammadu Buhari.
 
Executive Secretary of the Major Oil Marketers of Nigeria (MOMAN), Clement Isong, said the incoming government, which had promised to remove subsidy, is in the best position to plan and implement the removal.
 
“It is a reasonable thing to do. We know that the new government has said they will remove subsidies. The removal has to be done properly and the new government is in the best position to plan it for accountability and transparency,” Isong said.

culled from The Guardian

https://guardian.ng/news/after-800m-palliative-fg-suspends-subsidy-cites-wrong-timing/