FG to Shift PIA Implementation Over Subsidy Removal Pressures
For Nigerians, with a worsening economic condition, now is the wrong time for petroleum subsidy removal as households are facing high inflation and unemployment rates pressures. As much as it is needed, petroleum subsidy removal would aggravate existing pressures in the economy.
However, after much thought about planned revolt, social unrest, and Labour Union position, the Federal Government has proposed an 18-month extension for the implementation of the Petroleum Industry Act (PIA) originally scheduled to kick off this February.
The Minister of State, Petroleum Resources, Timipre Sylva, announced this while addressing State House reporters after a meeting with the President at the Presidential Villa, Abuja.
He said the executive will soon reach the National Assembly over the development. President Muhammadu Buhari on August 16, 2021, signed the Petroleum Industry Bill into law.
Buhari’s assent to the bill was in furtherance to the passage of the Bill by both the Senate and the House of Representatives earlier in July 2021. The law signed by President Muhammadu Buhari last August contains a provision for the elimination of fuel subsidies within six months.
On Monday, Finance Minister Zainab Ahmed said petrol subsidies were costing Nigeria up to $7 billion a year but the government had decided to suspend their removal because the timing was “problematic” amid rising inflation.
Labour unions have rejected the government’s planned hike in pump prices, threatening nationwide protest and urging authorities to speed up work on upgrading the country’s four refineries, which have been poorly maintained for decades.
Many view low petrol prices as one of the few benefits of living in an oil-producing country where graft and inefficiency are ingrained. Nigeria, Africa’s largest oil exporter, however, imports virtually all its fuel, a sore point for its government,
The PIA is expected to grow investors’ confidence in Nigeria’s Petroleum Industry and create more employment opportunities for the populace in the host communities.
“It has been agreed that the implementation period for the removal of the subsidy should be extended,” Timipre Sylva told reporters in Abuja, adding that parliament will need to approve the extension and amend the law.
Read: Subsidy Removal to Hike Petrol Price without Alternative Energy
In November, the government said the subsidy would be eliminated by mid-2022 and replaced with N5,000 in monthly payments for up to 40 million people, heeding World Bank’s call to scrap the payment to cut its deficit, forecasted at 3.42% of gross domestic product this year.
Sylva said the government was not “contemplating removing fuel subsidies,” following a meeting with Buhari, who doubles as oil minister. The Nigerian Labour Congress, representing millions of workers, said in a statement that it has suspended a protest planned this week and on Feb. 1, following the policy reversal.
#FG to Shift PIA Implementation Over Subsidy Removal Pressures
