Following wide consultations with stakeholders and in line with the current economic realities in the country, the Federal Government has backtracked on the removal of subsidy on petrol (Premium Motor Spirit) earlier scheduled for June 2022.
The extension, according to the government, is to give all the stakeholders time to ensure that the implementation is carried out in a manner that guarantees that all necessary modalities are in place to cushion the effect of the PMS subsidy removal.
Chief Timipre Sylva, the Minister of State for Petroleum Resources and Chairman, Petroleum Industry Act (PIA) Implementation Committee, announced the indefinite suspension in a statement personally signed by him on Tuesday in Abuja, a copy of which was given to Persecondnews.com
Persecondnews reports that the Organized Labour comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have begun mobilization nationwide for a total shutdown of the country effective from January 28 to protest the subsidy removal, saying it will further worsen the living standards and destroy livelihoods of Nigerians especially the poor.
The Federal Government had claimed that it subsidizes petroleum consumption at the current N162 and N165 per litre as pump price to the tune of N2 or N3 trillion yearly.
While announcing plans to remove the subsidy late 2021, the government said it will dole out N5, 000 to poor Nigerians to ameliorate their likely economic hardships.
Sylva said:“President Muhammadu Buhari has agreed to an extension of the statutory period for the implementation of the removal of subsidy on petrol (Premium Motor Spirit, PMS) in accordance with extant laws.
“However, following extensive consultations with all key stakeholders within and outside the government, it has been agreed that the implementation period for the removal of the subsidy should be extended.
“This extension will give all the stakeholders time to ensure that the implementation is carried out in a manner that guarantees that all necessary modalities are in place to cushion the effect of the PMS subsidy removal in line with prevailing economic realities.’’
On the likely effects of the subsidy removal on livelihoods of the poor, Sylva said: “The President assures that his administration will continue to put in place all necessary measures to protect the livelihoods of all Nigerians, especially the most vulnerable.’’
With the assent by the President on August 16, 2021, the PMS subsidy removal was, therefore, expected to take place effective February 16, 2022.
The new Petroleum Industry Act (PIA) provides for the unrestricted market pricing for PMS from the effective date of its coming into effect.
However, the PIA also envisages the potential for supply disruptions with its resultant effects on the economy. Consequently, it provides for a window of six months from the effective date for Government to request the services of Nigerian National Petroleum Company (NNPC) Limited as supplier of last resort.
The measure, Sylva explained, is to forestall supply disruptions and guide market readiness preparatory to migration to the deregulated pricing regime.