Nigerians to Pay More for Petrol as Subsidy Ends June 2022

October 27, 2021
fuel subsidy

By Sodeinde Temidayo David

From July 1, 2022, Nigerians may have to pay more to purchase a litre of premium motor spirit (PMS), commonly known as petrol, because the federal government intends to finally put a stop to the payment of fuel subsidy by the end of June 2022, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has said.

She made this disclosure on Tuesday at the Nigerian Economic Summit (NES#27) in Abuja.

The current administration of President Muhammadu Buhari has stopped petrol subsidy a few times, only to re-introduce through the back door. This occurs mostly when the price of the commodity is raised.

But with the signing of the Petroleum Industry Act (PIA) by Mr Buhari a few months ago, fuel subsidy is expected to become history. The government has set up a committee to look into the best way to gradually remove it and make Nigerians pay for the true value of the product.

Speaking at the event, Mrs Ahmed said the central government has made provision for petrol subsidy till the end of June next year, and that complete deregulation of the downstream oil and gas sector will start by July 2022.

“In our 2022 budget, we only factored in subsidy for the first half of the year, and in 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,” she said.

Also speaking at the programme, the Chairman of the Economic Advisory Council (EAC), Mr Doyin Salami, said he had argued for a long time on the issue of the subsidy, stressing that the PIA made fuel subsidy illegal.

“With the PIA essentially it makes illegal petrol subsidy and yes, there is a period where NNPC 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 will 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 subsidy will be gone,” the chairman noted.

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