FG Says Petrol Subsidy Stays Till June 2022

BoomRadioNG | October 28, 2021

The Federal Government through the Finance, Budget and National Planning Minister Mrs. Zainab Ahmed has said that there is no plan to end petrol subsidy.

Ahmed said provision has been made for the first six months of next year.

She explained that subsidy payment would stop since complete deregulation of the downstream oil and gas sector will start by July 2022.

The minister stated this at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja on Monday.

fuel station in Lagos

“In the 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry, “ Ahmed said.

At the event, Prof. Doyin Salami, chairman of the Economic Advisory Council (EAC), described subsidy payment as illegal.

Salami said he had argued for a long time that the subsidy needed to go since the Petroleum Industry Act (PIA) made the payment illegal.

The EAC chairman said: “The PIA essentially makes it illegal to pay petrol subsidies.Yes, there is a period where NNPC(Nigerian National Petroleum Corporation) and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is a provision.

“My view is that if we could get it done sooner than that, it would be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and the subsidy will be gone.”

fuel station in Lagos

Also, Director-General, Debt Management Office(DMO) Patience Oniha told participants that the government has so far issued N1.5 trillion promissory notes to its creditors.

Explaining the N1.5 trillion promissory notes issued by government creditors, Oniha, added: “We can’t talk about debt alone, we must also talk about revenues.We can’t talk about debt alone; we must also talk about revenues. When you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promissory notes of N1.5 trillion approved by the National Assembly.”

Ademola Adejuwon