FG has also concluded plans to approach the National Assembly to amend the Petroleum Industry Act (PIA)
By Emma Ogbuehi
The Federal Government is proposing to extend the period for the implementation of the removal of subsidy on Premium Motor Spirit (PMS), popularly known as petrol, by 18 months.
The Minister of State for Petroleum Resources, Timipre Sylva, announced this on Tuesday while briefing State House correspondents in Abuja.
This is a follow-up to the earlier announcement by the government to shelve the planned removal of subsidy on petroleum products till further notice.
Organised Labour and other interest groups had threatened a showdown with the government over the initial plan to withdraw fuel subsidy by the end of June.
Minister of Finance, Budget and Economic Planning, Zainab Ahmed, who announced the shift, revealed that the Federal Government made provisions for subsidy in the 2022 budget from January to June this year. According to her, all payments on fuel subsidy ordinarily would cease from July, 2022.
She, however, observed that in view of the timing which is “problematic”, the Federal decided to suspend its plan to go ahead with the removal of subsidy on petroleum products in July, particularly against the backdrop of outcomes from ongoing consultations. She added that the Federal Government is exploring alternatives to premium motor spirit as well as pushing to step up the country’s crude oil refining capacity.
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Sylva who announced the 18-month extension, disclosed that the government has concluded plans to approach the National Assembly to amend the Petroleum Industry Act (PIA).
“With assent by the President on August 16, 2021, the PMS subsidy removal was therefore expected to take place effective February 16, 2022,” the minister said. “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.”
Sylva, who chairs the PIA Implementation Committee, stressed that the decision of the executive arm of government to seek an amendment of the law was not politically motivated.
Rather, he explained that such a move has become necessary to halt the potential suffering of the vulnerable in the society.
The minister believes other measures such as the Dangote refinery, the Port Harcourt refinery, and other modular refineries will have significantly come on stream by the end of the year.
According to him, the new PIA provides for unrestricted market pricing for PMS from the effective date.
Sylva, however, stated that 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 the government to request the services of NNPC Limited as the supplier of last resort.
“This is to forestall supply disruptions and guide market readiness preparatory to migration to the deregulated pricing regime,” he added.
President Muhammadu Buhari, he stated, has assured Nigerians that his administration would continue to put in place all necessary measures to protect the livelihoods of the citizens, especially the most vulnerable.
