Nigerian government has finally yielded to pressure and shelved the planned removal of subsidy on petroleum products in the country. The subsidy issue was said to have dominated discussions at last week’s meeting of the National Economic Council chaired by Vice President Yeymi Osinbajo.
Announcing the suspension of the plan yesterday at a meeting at the National Assembly in Abuja, minister of finance, budget and national planning, Zainab Ahmed, said that the suspension would last till further notice.
The subsidy removal would have, however, taken effect from the end of June this year.
Observers said the hint on the federal government decision came when last week, minister of state for petroleum resources, Timipre Sylva, said that the government had no immediate plan to completely remove the subsidy.
“I will tell you categorically that at this moment, the complete removal of subsidy is not on our plate at all. The President of the Federal Republic of Nigeria is not in support of removing the subsidy at this time,” Sylva told a national television.
Two of the leading organised labour, the Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC), both vowed to resist the increased in price of petroleum products. The unions had already planned a nationwide protest on January 27, to register their displeasure on the plan.
Sylva had said that although it is a desirable policy, “we know that it will have some impacts on the people and that is why we are trying to work out some of those things.”
Government said it had made provisions in the 2022 budget to cover the budget up to June after which the subsidy would go and the prices of petroleum products completely deregulated.
At the end of the National Economic Council meeting in Abuja, the governors told journalists that they have not taken any decision on the subsidy matter, as the issue could only be agreed upon after June.
Since the announcement of the plan, the government has also been engaging with the labour unions. The pronouncement by Ahmed on Monday indicates that that point of agreement has been reached yet between the government and labour unions.
“Until those details are worked out properly with (the organised) labour, and with all the stakeholders in the sector, we will not remove the subsidy. At this moment, it is not on our plate, I can tell you that,” Sylva noted.
“This is something that needs to be worked out between the Federal Government and the states because this is a federation issue. We are working with the governors to see how we can continue with this policy direction of subsidising fuel for the foreseeable future.”
The government has been under pressure from the World Bank and the International Monetary Fund (IMF) to raise the prices of petroleum products and electricity tariff in the country, as a way of reducing the budget deficits and worsening macroeconomic balance.
Under the Petroleum Industry Act signed last year by President Muhammadu Buhari, the existing subsidies on petroleum product will end in June, covering the six-month period for which there is provision for it in the 2022 budget.
By Chibisi Ohakah, Abuja
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