FG Suspends Planned Petrol Subsidy Removal

The Nigerian government has shelved the planned removal of subsidy on petroleum products in the country.

 The suspension of the plan was announced late Monday by the Minister of Finance, Budget and National Planning, Zainab Ahmed.

 Ahmed said that the suspension would last till further notice. She disclosed this while speaking at a meeting at the National Assembly.

 The removal of the subsidies, which would have set prices rising through increased fares, was planned to take effect at the end of June this year. 

 Feelers that the government might have changed its stand on the plan came when the Minister of State for Petroleum Resources, Timipre Sylva, said that the government had no immediate plan to completely remove the subsidy.

 He spoke on Channels TV Newsnight programme.

 “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 the subsidy at this time,” Sylva said

 The organised labour has said it would resist the plan. Two of them, the Nigeria Labour Congress and the Trade Union Congress, had already planned a nationwide protest on January 27, to register their displeasure on the plan.

  Talking about the planned subsidy removal, Sylva had said that although it is a desirable policy, “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”.

 The subsidy was expected to take off after June this year. According to statements from government officials, including Finance Minister Ahmed, the government had made provisions in the 2022 budget to cover the budget up to June after which the subsidy would go and the prices of petroleum products completely deregulated.

 The subsidy issue was the major discussion at last week’s meeting of the National Economic Council chaired by Vice President Yeymi Osinbajo. At the end of the meeting in Abuja, the governors told journalists that they have not taken any decision on the subsidy matter, as the issue could only be agreed upon after June.

Since the announcement of the plan, the government has also been engaging with the labour unions. The pronouncement by Ahmed on Monday indicates that that point of agreement has been reached yet between the government and labour unions.

 “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,” Sylva noted.

 “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.”


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