Connect with us

Headlines

FG Cites High Inflation and Economic Hardship As Reason for Postponing Petrol Subsidy Removal

Published

on

The Federal Government has postponed the planned petrol subsidy removal till further notice due to “high inflation and economic hardship”.

Subsidy or under-recovery is the underpriced sales of premium motor spirit (PMS), better known as petrol.

The government had planned to stop subsidy payments on petroleum products from July this year.

Zainab Ahmed, minister of finance, budget, national planning, disclosed this on Monday in Abuja at a meeting with Senate President Ahmad Lawan.

The meeting had Timipre Sylva, minister of state for petroleum resources; representatives of oil companies, among others, in attendance.

Last week, Lawal had said Buhari did not direct the removal of petrol subsidy, saying their “constituents are raising concerns over the policy”.

The National Economic Council (NEC) said it is still considering the recommendations of its ad-hoc committee – which proposed full deregulation and N302 per litre for PMS.

Petrol subsidy payments gulped N1.43 trillion in 2021, shrinking revenue accrued to the federation account to N542 billion – a shortfall from the projected N2.51 trillion. In December 2021, Nigeria spent N270.83 billion to cater for the cost of petroleum shortfall.

The finance minister said the government had to reconsider its decision after the 2022 budget was passed.

Ahmed said petrol subsidy was provided for in the 2022 budget to run from January till June.

She, however, said that after consultations with stakeholders — in view of the high inflation and economic hardship – additional provisions would be made beyond the initial period.

According to her, it has become clear that the timing for the removal of petrol subsidy will be problematic as the country still experiences heightened inflation.

“Provision was made in the 2022 budget for subsidy payment from January till June. That suggested that from July, there would be no subsidy,” Ahmed said.

”The provision was made sequel to the passage of the Petroleum Industry Act, which indicated that all petroleum products would be deregulated.

“Sequel to the passage of the PIA, we went back to amend the fiscal framework to incorporate the subsidy removal.

“However, after the budget was passed, we had consultations with a number of stakeholders, and it became clear that the timing was problematic.

“We discovered that practically, there is still heightened inflation and that the removal of subsidy would further worsen the situation and impose more difficulties on the citizenry.

“Mr President (Muhammadu Buhari), does not want to do that. What we are now doing is to continue with the ongoing discussions and consultations in terms of putting in place a number of measures.

“One of these include the roll-out of the refining capacities of the existing refineries and the new ones, which would reduce the amount of products that would be imported into the country.

“We, therefore, need to return to the National Assembly to now amend the budget and make additional provision for subsidy from July 2022 to whatever period that we agreed was suitable for the commencement of the total removal.”

On his part, Lawan appealed to the leadership of the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to shelve their planned industrial action over subsidy removal as it has become unnecessary.

TheCable

Continue Reading
Advertisement


Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Headlines

Atiku Vindicated As Tinubu Seeks Another $20.52bn, €1.045bn Loan

Published

on

Former Vice President and African Democratic Congress presidential candidate, Atiku Abubakar, has said President Bola Tinubu’s request for approval to borrow $20.52 billion and €1.045 billion vindicates his October 12 warning about a loan plan of up to $20 billion.

Atiku said the President’s failure to identify the specific projects the loans would fund raises serious concerns that borrowed public money could be channelled through the Lagos–Calabar Coastal Highway, now rerouted inland, to political campaigners and favoured contractors.

In a statement issued by Phrank Shaibu, Director of Strategic Communication of the ADC Presidential Campaign Council, Atiku said:

“On October 12, I warned Nigerians that President Tinubu was reportedly preparing to borrow up to $20 billion in connection with the Lagos–Calabar Coastal Highway. I asked him to confirm or deny the plan and publish the accounts. He did neither. Today, he has asked the Senate to approve $20.52 billion and €1.045 billion in external loans. My warning has been vindicated.

“The President has listed broad sectors but has not provided a project by project account of what this enormous borrowing will fund. Nigerians have not been given clear project details, costs, locations or contractors to scrutinise.

“That silence is especially troubling given the highway’s inland rerouting. Nigerians have every right to ask whether it is becoming a pipeline for borrowed money to reach Tinubu’s campaigners and favoured contractors. Barely 12 weeks before an election, how can the President ask lawmakers to saddle Nigerians with more than $20 billion and €1 billion in debt without identifying the projects and their costs? Is this a development plan for Nigerians or a campaign financing scheme dressed up as infrastructure?

“You cannot continue taking frivolous loans on the eve of your departure from office. Let it be on record that one of the first responsibilities I will undertake as President is to scrutinise and investigate every kobo borrowed, especially loans taken in the final year of your tenure. Nigerians will ask questions, and we will find the answers by every lawful means.

“I put local and international lenders on notice: any loan granted to this winding down administration must meet all constitutional, statutory and due process requirements. Upon assumption of office, I will scrutinise every such loan. Any borrowing found to have been obtained without proper authorisation or process will be challenged and will not be allowed to stand.

“The National Assembly must not approve a single dollar until the President publishes every project, contract, cost, contractor, loan term and repayment obligation. No public money should be borrowed in the dark, and no lawmaker should sign a blank cheque against Nigeria’s future.”

Atiku said the burden was on Tinubu to prove that the borrowing would serve the country, not his political interests. He urged lawmakers to publish the proposal and supporting documents and subject them to rigorous scrutiny before any decision.

He added that families already struggling with a cost of living crisis should not be made to carry debts they did not approve. The woman fighting to keep her business alive and the worker spending their income just to feed deserve to know where the money is going, who will benefit and who will pay. At the ballot box, Nigerians will have the chance to reject a government that borrows against their future while taking their sacrifices for granted.

Continue Reading

Headlines

2027: Nigerians Tired of ’Emi lokan’ Presidency, Makinde Mocks Tinubu

Published

on

The Allied Peoples Movement (APM) presidential candidate, Seyi Makinde, on Thursday, criticised President Bola Tinubu’s “Emi Lokan” slogan ahead of the 2027 presidential election.

Makinde said Nigerians do not need “turn-by-turn nepotism”, arguing that voters should be free to decide who becomes the country’s next president in 2027.

The Oyo State governor spoke during the APM’s town hall meeting in Akure, Ondo State.

Makinde asked: “How can someone say ‘Eemi lokan’ in a country like Nigeria? You were given the opportunity. If you recall the 1999 presidential election, the South-West voted massively for Baba Olu Falae, but the rest of Nigerians voted for Baba Obasanjo. So, this is not an issue that only the South-West can resolve; it is an issue we must address collectively as Nigerians.

“We do not want ‘turn-by-turn nepotism’, nor do we want a situation where people say, ‘I will vote for projects because it is my turn’. You will not finish those projects, and when it becomes someone else’s turn, they will do the same thing. We will end up with a Nigeria where we cannot get value for the resources belonging to Nigerians.

“The Reset Nigeria agenda is about building a country where infrastructure development supports economic growth and addresses the concerns of young people and women.

“Once we fix our economy, no zone will be left behind, and no demographic group will be left behind.”

Continue Reading

Headlines

Oyedele Denies Hinting FG’ll Introduce Fuel Tax In spite of Video Evidence

Published

on

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has denied saying the Federal government will introduce a fuel tax when the economy stabilises and income levels improve.

In a post on X on Tuesday, Oyedele said his remarks during an interview with ARISE News was misrepresented, insisting that a “fuel tax is not on the table.”

However, during the interview with Rotus Odiri, ARISE News Business Correspondent, on the sidelines of the 2026 International Monetary Fund and World Bank annual meetings in Bangkok, Thailand, Oyedele said the tax would come when income levels improve enough for Nigerians to accommodate it.

He said taxes account for between 20 and 80 percent of pump prices in some countries, while many African countries impose between six and 10 different taxes on fuel products.

He said introducing fuel tax while petrol was still subsidised would have been counterproductive because government would effectively be paying the tax itself.

According to him, imposing the tax immediately after removal of petrol subsidy would be insensitive to Nigerians.

“The objective should be that instead of trying to suppress prices, which hasn’t worked for us, it hasn’t worked for any country in the world, not one. Instead of trying to suppress prices, think about how to grow income faster than prices rise,” Oyedele said.

“That’s how you bring prosperity and grow the middle class and that is exactly what we are doing as led by Mr. President himself.

“At the appropriate time, when the economy has stabilizes and income level will be able to accommodate it, those taxes will come. Not because we want to impose taxes,” he added.

In his Tuesday post, the minister reiterated that introducing a fuel tax at this time would be insensitive following removal of petrol subsidy, describing reports that government will introduce the levy when the economy stabilises as “fake news.”

Continue Reading