FG bows to pressure, suspends fuel subsidy removal

NNPC to continue to bear the burden of fuel subsidy

The Federal Government has suspended the planned removal of petroleum subsidy.

This follows growing criticisms against the decision and threats of nationwide strikes by the organised labour to resist it.

The Minister of State for Petroleum Resources, Timipre Sylva, who made the disclosure, explained that it is clear that it is not possible to remove the subsidy on petroleum products due to some impediments.

He said this during a meeting with Senate President Ahmad Lawan, yesterday, in Abuja, over the planned removal of subsidy on petroleum products by the Federal Government.

The News Agency of Nigeria (NAN), reports that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, was also at the meeting.

Sylva said: “It is not within the contemplation now, of this administration, to remove subsidy, but of course, if there are legislative enablers that will ensure it is within the law, then I think it is a legislative responsibility.

“Subsidy removal will not happen. When you pass a law, a law is not cast in stone. In implementing the law, you now arrive at some impediments to implementation.

“We now feel we need to take care of those impediments because before the subsidy is removed, there are certain things that need to be put in place to protect the people.

“We feel we need some time to be able to put everything in place so that when the subsidy is removed, it will have minimal impact on the people,” the minister said.

A lot of us in this administration believe that the issue of removal of subsidy should be handled with utmost care, especially as sufficient planning needs to be done.

Bad timing

In his remarks, Lawan faulted the timing of the planned subsidy removal.

He said despite that the administration and management of subsidy on petroleum products were flawed; the President Muhammadu Buhari-led government believed that sufficient planning must be carried out before its eventual removal.

He said: “The position of everyone in government today is that, admittedly, subsidy administration and management are flawed because of so many reasons.

“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 as sufficient planning needs to be done.”

Lawan therefore pleaded with the Nigeria Labour Congress (NLC), and the Trade Union Congress (TUC), to stop their planned protest against the proposed subsidy removal, saying the move was no longer necessary.

He continued: “I am taking this opportunity to appeal to the TUC and NLC to shelve this plan to go on strike or demonstration, it is totally unnecessary.

“There is not going to be a removal of subsidy; so, there is no need for this. Please, let’s not create unnecessary tension where there should be none.”

Budgetary provision  

On her part the Minister of Finance, Ahmed, noted that the Government already made provisions for fuel subsidy in the 2022 Budget – from January to June.

According to her, all payments on fuel subsidy ordinarily would cease as from July 2022.

She said in view of the timing which was “problematic”, the government decided to shelve the removal of subsidy in July, particularly against the backdrop of outcomes from ongoing consultations.

She however said the government was exploring alternatives to premium motor spirit (PMS) as well as pushing to step up Nigeria’s crude oil refining capacity.

Recall that the labour unions had planned to hold a protest from January 27 over the planned subsidy removal.

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