Fuel subsidy removal, FG says was halted because there is still heightened inflation and that its removal would worsen it
The Federal Government said it has shelved the planned fuel subsidy removal until further notice.
Minister of Finance, Zainab Ahmed and her counterpart at the Petroleum Resources ministry, Timipre Sylva, disclosed this during a stakeholder meeting with the President of the Senate, Ahmad Lawan, in Abuja.
Zainab Ahmed said the federal government suspended the planned fuel subsidy removal because of high inflation.
She said, “Provision was made in the 2022 budget for subsidy payment from January till June. That suggested that from July, there would be no subsidy.
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“The provision was made a sequel to the passage of the Petroleum Industry Act which indicated that all petroleum products would be deregulated.
“Sequel to 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 (Muhammadu Buhari), 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 roll-out 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, during a Channels Television interview earlier said Buhari was not in support of the fuel subsidy removal.
He said: “I will tell you categorically that at this moment, the complete removal of subsidy is not on our plate at all.
“The President of the Federal Republic of Nigeria is not in support of removing subsidy at this time.
“Of course, we all know that it is a desirable policy direction. Of course, we know that it will have some impacts on the people and that is why we are trying to work out some of those things.
“Until those details are worked out properly with (the organised) labour, and with all the stakeholders in the sector, we will not remove the subsidy. At this moment, it is not on our plate, I can tell you that.
“This is something that needs to be worked out between the Federal Government and the states because this is a federation issue. We are working with the governors to see how we can continue with this policy direction of subsidising fuel for the foreseeable future.”
