The National Economic Council (NEC) has considered the possibility of extending the June 2023 deadline set for the removal of subsidy on petroleum products especially Premium Motor Spirit (PMS) popularly known as petrol.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, dropped the hint on Thursday after the meeting presided over by Vice President Yemi Osinbajo at the Council Chambers of the Presidential Villa, Abuja.
She, however, said that all preparatory works on the planned removal should continue in consultation with the states and other key stakeholders, including representatives of the incoming administration.
She said: “Today, I was in the National Economic Council, where we discussed the issue of fuel subsidy removal. Council agrees that the timing for the removal of subsidy should not be now but that we should continue with all of the preparation works that need 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.
“So, we will be working together with representatives of the state, 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.”
When asked about the specific measures on the development, she said: “The immediate committee is just the NNPC, the downstream upstream regulator, as well as the Ministry of Finance, Budget, and National Planning. So, there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process but that there is sufficient consultation taking inputs from key stakeholders into the measures that need to be taken.”
When probed further to explain what she meant when she said “council agreed that timing for removal of fuel subsidy should not be now” and asked if she was saying that fuel subsidy removal had been put on hold, Zainab said: “Yes, I did. What I said is that it is not going to be removed now, which means it will not be removed before the transition is completed. But then we’ve had two laws that have inadvertently made the provision that we should exit by June.
“So, if the committee’s work, which will include the representatives of the incoming administration, determined that the removal can be done by June, then the work plan will be designed to exit as of June. “But if the determination is that the period is extended, it will mean that as a country we will have to revisit the Appropriation Act for example, because the 2023 budget only provision up to June, or amend the PIA,” Zainab explained.
Asked whether the council discussed the $800m World Bank loan and if there were other palliatives, the minister said: “On the issue of the $800 million so far, what we have is that $800 million that has been secured. We’re hoping that with removal of fuel subsidy, the savings that removal will cause to the Federation, federal government and states themselves will be able to provide further measures from this increased revenue that will accrue to the Federation account.”