FG to end petrol subsidy by June 2022

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Uba Group

BY KENNETH EZE

Going by the 2022 budgetary provisions, the much talked about petrol subsidy would end June, next year.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Monday at a panel session during the 27th National Economic Summit, revealed that the Federal Government made provision for petrol subsidy covering the first six months of next year.

She said, “In our 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.”

Also during the session, the World Bank’s Country Director for Nigeria, Shubham Chaudhuri, expressed concern that Nigeria would be spending up to N2.9trillion this year on petroleum subsidy, while essential areas of the economy like primary healthcare, basic education and rural roads were left unattended to.

“This year, Nigeria is on track to spend N2.9trillion on PMS subsidy, which is more than it spends on health,” Chaudhuri said.

He used the image of a malnourished individual needing urgent treatment to buttress Nigeria’s case, and maintained that critical decisions needed to be made for the country to realise its potential.

“I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria.

“The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the Petroleum Industry Act coming into effect, this will go away.

“But the fact is can Nigeria even afford to wait for those six months? And there is a choice: N3tillion to PMS subsidy which is depriving states of much-needed revenues to invest in basic services.”

The Chairman, Presidential Economic Advisory Council, Prof. Doyin Salami, said he had argued for a long time that subsidy really needed to go.

He said, “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 provision.

“My view will be, 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 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.”