Buhari moves to dump decision on fuel subsidy removal for next govt

The Nigerian government has said it would approach the National Assembly with a Bill to delay the implementation of the Petroleum Industry Act for another 18 months.

With this, the President Muhammadu Buhari-led administration would be dumping the responsibility of taking a decision on removal of subsidy on Premium Motor Spirit (PMS) also called petrol, unto the next government.

The move came to light during a press briefing by the Minister of State for Petroleum Resources, Timipre Sylva in Abuja, on Tuesday who also confirmed the temporary suspension on the proposal to eliminate payment of fuel subsidies.

The minister disclosed that the government was planning to send a Bill to the National Assembly for an amendment of the Petroleum Industry Act (PIA) with a proposal to extend its implementation by 18 months, a period by which the present administration would have handed over power to another administration.

By implication, the implementation of the PIA which was to begin in February this year would be shifted to July 2023, two months after the present administration was billed to hand over power by May 29, 2023.

The Nigerian Petroleum Industry Act (PIA), which was enacted into law in August 2021, provides for the complete deregulation of the downstream sector, creating a situation whereby market forces would determine the price of petroleum products.

Several provisions of the PIA were designed to ensure that only solvent organisations participate in the petroleum industry commercialisation.

READ ALSO: Nigerian govt not considering fuel subsidy removal now —Minister Timipre Sylva

This was in order to ensure transparency, solvency and profitability.

“NNPC limited and any of its subsidiaries shall conduct their affairs on a commercial basis in a profitable and efficient manner without recourse to government funds. The organisation shall retain 20% of its funds to grow its business,” a section of the PIA read.

During the conference, Sylva stated that there was already a provision within the PIA which empowers the Federal Government to effect the total removal of fuel subsidies.

However, this mandate had to be suspended due to the lack of requisite infrastructures necessary to mitigate its effects on the populace.

“There is already a provision in the law but because President Muhammadu Buhari is concerned about the plight of the people, he believes that the impact the removal of subsidy will have on the people should be mitigated by putting the right structures in place — these structures are not in place.

“The modalities to ensure refineries are revamped are in place. The Dangote Refinery will commence at the end of the year; the Port-Harcourt refinery will also be functional at some capacity.

“There is a scheme to ensure the introduction of auto gas for automobiles with the conversion of one million cars by April with corresponding stations. We have discussed with manufacturers who are willing to set up the requisite infrastructure so it is a 50-50 arrangement which has been concluded.

“Thereafter, Nigerian marketers will be able to access the funding in order to ensure a widespread ripple effect. All these will come together before the removal of fuel subsidy.

“All these have to be in place before the removal of subsidies; also the introduction of palliatives by the Finance Minister.

“Therefore, the time is being extended which is not specific but subject to discussions to National Assembly and amendment of the PIA. At this moment, fuel subsidy removal is not on the cards,” the Minister explained.

He also implored Nigerians and stakeholders to desist from panic-buying and hoarding of fuel products which informed the need for an explicit clarification of the mandate and timeline by the FG.

Sylva said, “I noticed some queues building up and this is not natural due to the actions of profiteers who begin to hoard the fuel; all these informed the need for the panic buying which is why the FG had to issue this clarification in order to allay the fears of the populace.

“This reversal is not because of the upcoming elections but due to the need to ensure there are measures in place to mitigate the effects on Nigerians.

“Engagement with labour will continue and is always an ongoing process. It is a developing process and by July 2022, there should be another briefing on additional developments. Our discussions with labour are around these palliatives for Nigerians. There is also no possibility of gradual increase.”

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now