The Federal Government was requested by the National Economic Council in Abuja to postpone the June deadline for the elimination of fuel subsidies while it reviews current plans to provide Nigerians with palliative care.
The council said the Federal Government would widen consultations with state governments and other significant players, such as labor unions, petroleum marketers, and the Ministry of Finance, while still insisting that the removal of the gasoline subsidy should not happen right away.
Zainab Ahmed, the minister of finance, the budget, and national planning, warned that if the next administration supported the decision to extend subsidy removal, it might be necessary to submit a supplemental budget to the National Assembly.
However, the Council has reportedly agreed that the subsidy needs to be “removed now, rather than later,” She noted that the 2023 budget provides for subsidy only up to June 2023. More so, the provisions of the Petroleum Industry Act require the deregulation of several sectors 18 months after the effective date of the subsidy removal.
Therefore, she said the Federal Government had agreed to form an expanded committee to consider the removal process. This includes determining the exact time and the measures to be taken to support the poor and vulnerable and ensure a sufficient supply of petroleum products nationwide. However, the incoming administration would have to amend both the Appropriation Act and the PIA to bring them at par with current realities, based on their decisions on the fuel subsidy, she explained.
Successive administrations have failed to cut or completely remove the subsidy, a socio-politically delicate matter in Africa’s largest economy. Between January and September 2022, the Federal Government said it spent $7.5bn on fuel subsidy, describing it as an inefficient use of resources stifling Nigeria’s economic potential.