The Minister of Finance, Budget, and National Planning in Nigeria, Zainab Ahmed, clarified why the federal government has no intention of suspending the removal of petrol subsidy.
Ahmed had earlier indicated on Thursday that the National Economic Council (NEC) had agreed to temporarily suspend the subsidy removal. However, in a statement issued on Friday, the Minister revealed that the government had no plans to suspend the subsidy removal but instead planned to expand the subsidy removal committee to include teams from the incoming administration and state governors.
She explained that the NEC extensively deliberated on the matter and concluded that the subsidy removal was necessary as it was not sustainable. Still, she emphasized the need for further consultations, including involving representatives from the incoming administration and state governments.
“We agreed to form an expanded committee that will be looking at the process for the removal of the subsidy, including determining the exact time as well as the measures that need to be taken to provide support to the poor and the vulnerable,” Ahmad was quoted by Yunusa Abdullahi, the minister’s special adviser on media and communications.
“There is also the need to agree to alternative measures that will be put in place to ensure that there is sufficient supply of petroleum products in the country.”
According to Ahmed, the current subsidy removal committee consists of the Ministry of Finance, Budget, and National Planning, the Ministry of Petroleum Resources, Nigerian National Petroleum Company (NNPC) Limited, the downstream and upstream regulators, the Central Bank of Nigeria (CBN), and the Chief Economic Adviser to the President.
Furthermore, she noted that both the 2023 Fiscal Framework and Appropriation Act and the Petroleum Industry Act (PIA) have stipulated that the government should terminate petrol subsidy by June 2023.
“The committee is to work out a road map for the removal of the subsidy. No change in the overall policy direction regarding the petrol subsidy is envisaged by June 2023,” the minister added.
The federal government has announced its plan to terminate under-recovery payments by June 2023 after allocating N3.35 trillion for subsidies in 2022.
Additionally, on April 5, the government revealed that it had received $800 million from the World Bank as part of its post-subsidy relief initiatives.
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