The National Economic Council, NEC, has suspended the planned removal of subsidy on petroleum products by the end of President Muhammadu Buhari’s administration.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, on thursday, disclosed this while briefing State House correspondents at the end of the NEC meeting presided over by Vice President Yemi Osinbajo at the Presidential Villa, Abuja.
She stated that the removal of the subsidy will likely take effect in June because the Petroleum Industry Act, PIA and the 2023 budget provided subsidy till June, hence any delay may require the amendment of the PIA and the budget provision.
She, however, said that there was no deadline given for the subsidy removal and that the incoming administration will take decision on when possible to do that.
Ahmed explained that although the removal of fuel subsidy was imminent, the council decided that the timing for the removal of subsidy should not be now.
According to her, “The National Economic Council, NEC, discussed the issue of post-subsidy removal. The Council agreed that the timing for the removal of subsidy should not be now but that we should continue with all of the preparatory work that needs to be done and that this preparatory work has to be done in consultation with the states and other key stakeholders, including representatives of the incoming administration.
“The council agreed that fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary humans.
“So, this will require looking at alternatives to the post-subsidy that needs to be planned for and subsequently put in place but also what needs to be done to support the people that are most affected as a result of the removal.
“So, we will be working together with representatives of the states who will have a plan that will start working on putting the building blocks towards the eventual removal of the fuel subsidy.
“Finally, remind the forum that the budget for 2023 has provision for subsidy only up to June 2023 and also the Petroleum Industry Act has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the removal and that period is also up to June 2023.
The minister said issues bordering on the deadline for removal of fuel subsidy should be the burden of the next administration as the laws states that the removal of fuel subsidy should happen in June.
