Highlights of fuel subsidy removal

25 Jan Highlights of fuel subsidy removal

After hinting of it upon a meeting with President Buhari last week, the Senate President Ahmad Lawan convened a gathering at which the Federal Government made a formal announcement of the suspension of plans to remove fuel subsidy, despite the huge hole it creates in government finances.

# Finance Minister Zainab Ahmed said the Federal Government initially had plans to remove subsidies on petroleum products from July this year but it has discovered that the timing is problematic.

She explained that: “The provision was made 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 includes the roll out of the refining capacities of the existing refineries and the new ones which would reduce the 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.”

# Lawan appealed to the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to shelve their planned industrial action over subsidy removal as it has become unnecessary.

He said: “Admittedly, the burden is huge and massive and there is a need at one point to do away with the subsidy. Even though our economy is growing, we still have the challenge of getting things to be better for our people.

“A lot of us in this administration believe that the issue of removal of subsidy should be handled with utmost care, especially that sufficient planning needs to be done.It is not about NLC, we are talking about every Nigerian. We are concerned beyond the Nigeria Labour Congress.”

# The Minister of State for Petroleum Resources, Chief Timipre Sylva, who had said it was clear for the “blind to see and the deaf to hear” that the fuel subsidy would not be removed, later convened a meeting with oil marketers in the downstream sector to perfect plans for the full deployment of autogas in filling stations and the conversion of 200,000 commercial vehicles to run on gas this year.