By Modupe Gbadeyanka
The removal of subsidy on premium motor spirit (PMS), otherwise known as petrol, earlier planned for next month has been suspended by the National Economic Council (NEC).
The Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed, announced the suspension of the fuel subsidy removal during a chat with state house correspondents in Abuja on Thursday.
She disclosed that at the meeting chaired by the Vice President, Mr Yemi Osinbajo, it was explained that the action was taken because of the timing of the removal.
The government of President Muhammadu Buhari had planned to remove petrol subsidy at the end of his tenure on May 29, 2023, giving the incoming administration of Mr Bola Tinubu the task to take an action that could affect his popularity among Nigerians.
At the valedictory NEC meeting today, the council said next month was not the favourable time to remove the subsidy.
The federal government, to ensure consumers pay lesser for petrol, subsidises the product, putting pressure on the funds shared by the three tiers of governments monthly.
At the meeting on Thursday, NEC advised that the next administration should be given the honour to decide whether to leave or remove petrol subsidy.
“Today, I was in the National Economic Council, where we discussed the issue of post-subsidy removal. The council agreed that the timing for the removal of subsidy should not be now, but that we should continue with all of the preparation works that needs to be done and that this preparation work has to be done in consultation with the states and other key stakeholders, including representatives of the incoming administration.
“The council agreed that the first subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians.
“So, this will require looking at alternatives to the post subsidy that needs to be planned for and subsequently put in place but also what needs to be done to support the people that would be most affected as a result of the removal.
“So, we will be working together with representatives of the States. We will have a plan that we will start working on putting the building blocks towards the eventual removal of the fuel subsidy.
“If I May remind the forum, that the budget for 2023 has provision for subsidy only up to June 2023 and also the Petroleum Industry Act (PIA) has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the PMs removal and that period is also up to June 2023,” the Finance Minister said.
