The federal government Monday halted its proposed plan on subsidy removal from pump price of Premium Motor Spirit (PMS) otherwise called petrol July this year.
The development came as Minister of State for Petroleum Timipre Sylva quoted President Muhamadu Buhari as having declared he had no hand in the planned removal.
Senate President Ahmad Ibrahim Lawan had last week, said President Buhari told him he never ordered any official to remove the subsidy.
He said they (lawmakers) came under heat from their constituents during the New Year/Christmas recession, pointing out that Nigerians expressed dissatisfaction with the planned removal of the subsidy.
This position countered that of Minister of Finance, Budget and National Planning Zainab Ahmed, who had earlier declared June deadline as end of the fuel subsidy regime in Nigeria.
The minister said the decision was in line with the dictates of the Petroleum Industry Act (PIA) which emphasises the deregulation of the oil industry.
But in a quick U-turn, Minister Ahmed announced Monday that the federal government’s decision to halt the move until further notice.
She spoke at an emergency meeting with Senate President Lawan in Abuja.
Ahmed, however, said the decision would affect the implementation of the PIA.
Speaking to journalists at the meeting convened by Senator Ahmad, the finance minister said the federal government initially had the plans to remove subsidy on petroleum products from July this year, a reason it made adequate provision in the 2022 national budget for subsidy payment till June only.
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.
“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
“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 to 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.”
Also confirming the latest development, Senate President Lawan said: “Recall that last Tuesday I visited the President on the possible removal of subsidy on petroleum products in the country and after my meeting with the President I addressed the press in the Villa.
“Admittedly, the burden is huge and there is need at one point to do away with subsidy but the president genuinely feels for Nigerians particularly the most vulnerable.
“Because of this feeling by the president and most 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.
“Significant arrangement for absorbing the shock that will come with the removal should be done and the timing is such that the impacts and consequences will not add to hardships.”
He, however, added that in line with implementation of PIA, subsidy would eventually be removed but not too soon as earlier projected for July this year.
The lawmaker therefore urged the organised labour unions in the country to shelve their proposed nationwide protests as it was no longer necessary.
The meeting which was still on as at the time of this report, had in attendance , Minister of State for Petroleum
Resources Sylva and Group Managing Director NNPC Limited Mele Kyari, among others.
Sylva absolves Buhari
Also exonerating President Buhari from the planned removal of the subsidy, Sylva said the “complete removal is not in our plate at all.”
The minister made the position known while featuring on Channels Television’s News night programme.
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,” Sylva further added.
Like her finance counterpart, he said the federal government needed to tread softly because of the negative impacts subsidy removal would have on Nigerians.
He said: “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.”
‘FG playing games’
Commenting on the government’s decision to back down, former Secretary General Organisation of African Trade Union Unity (OATUU) Owei Lakemfa said the government was merely playing games with Nigerians on fuel subsidy.
He said “its decision to shelve the announced subsidy withdrawal is a tactical move hoping to lure Nigerians to sleep and then suddenly slapping steep fuel price increases on them.”
“President Buhari has repeated a number of times that fuel subsidy is a fraud, so why shelve, rather than back away from the removal of the fraudulent subsidy?
“If we are an oil producing country with four refineries and an installed capacity of 445,000 bpd but do not refine a drop, will it be
logical for government to penalise the citizenry for its gross incompetence?
“If after seven years of claiming to be a functional government, the Buhari administration cannot add value to the life of Nigerians, then it has no right to continuously devalue it,” he said.
Also, Director International Press Centre (IPC) Lanre Arogundade said “they are bowing to pressure but we must remain vigilant.”
Similarly, Director of Programmes Yiaga Africa Cynthia Mbamalu said it is a positive step to see the federal government stepping down its decision on the removal of fuel subsidy especially with the current realities in Nigeria, the level of poverty and the hardship faced by citizens.
“Government policy has to, at all-time take into cognizance the demands and realities of the people. While the proposed decision on the removal of fuel subsidy remains an important national decision to be made subsequently, it should be a decision that is implemented with better timing.
“The decision of a better timing will be determined by several factors some of which include first; the adoption of a more people-centric approach in the decision to removal of subsidy.
“This will require different levels of citizens and stakeholders’ consultations to ensure the narrative on the removal is clear, accurate and devoid of political mischief.
“Secondly, will be the need for the introduction and implementation of economic policies to cushion the effect of the removal of fuel security, and investing in social security and welfare of the people.
“Thirdly will be need to build citizens trust in government driven by a commitment by the government to accountability, especially with respect to fiscal management,” she said.
APC lauds Buhari
And in its reaction, the ruling All Progressives Congress (APC) described the stoppage of the planned subsidy removal as a welcome development.
In a statement Monday in Abuja, the party’s national secretary, John James Akpanudoedehe, said the federal government took into consideration the fact that the removal of subsidy at this time would heighten inflation and cause undue hardship on the citizenry.
“Programmes and policies of government are meant to benefit the people. So if the timing of the planned subsidy removal would cause hardship on citizens, then a review was necessary. We commend President Muhammadu Buhari for
always putting the welfare and well being of Nigerians first as he has serially displayed in the implementation of programmes and policies of this administration.
“In line with the new Petroleum Industry Act (PIA), the Federal Government is already putting in place measures, particularly boosting our local refining capacities to reduce the country’s reliance on expensive import of refined petroleum products. This will in due course usher in the eventual and full deregulation of the country’s petroleum sector.
“Finally, the APC commends the cordial and healthy relations between the executive and the 9th National Assembly which has ensured good governance. Nigerians have been the ultimate beneficiaries as displayed in the positive outcomes of the meeting between Minister of Finance, Budget and National Planning, Dr. Zainab Ahmed and the Senate President Ahmad Lawan on the suspension of the planned subsidy removal,” the statement further said.