The Federal Government in the 2022 budget has made provision for petrol subsidy till the end of June of that year. This was made known by Minister of Finance, Budget and National Planning, Zainab Ahmed, on Monday at a panel session during the 27th National Economic Summit, in Abuja.
According to her, the 2022 proposed budget, only factored in subsidy for the first half of the year. She revealed that the Government is planning to complete deregulation of the sector by the second half of the year, to conserve foreign exchange and potentially earn more from the oil and gas industry.
Recall that the FG did not make provision for petrol subsidy on the 2021, rather NNPC directly deducted the subsidy payment from its FAAC remittance, thereby affecting revenue accruable to the Federation.
Whereas, the World Bank Country Director for Nigeria, Shubham Chaudhuri, in his remark at panel session, challenged Nigerian Government to redirect the provision made for subsidy to primary healthcare, basic education and rural roads.
“This year, Nigeria is on track to spend N2.9tn on PMS subsidy, which is more than it spends on health,” he said. The World Bank Director observed that some critical decisions need to be made now for the country to realise its potential.
He said, “I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA(Petroleum Industry Act) coming into effect, this will go away.
“I think the urgency of doing something now is because the time is going in terms of retaining the hope of young Nigerians in the future and potential of Nigeria. The kinds of things that could be done right away – the petrol subsidy; yes, I hear that six months from now, perhaps with the PIA(Petroleum Industry Act) coming into effect, this will go away.
The World Bank scribe however doubted the country’s capacity to survive those six months, amidst options of rather spending N3tn provision for PMS subsidy on providing basic services for the citizens.
Professor Doyin Salami, Chairman, Presidential Economic Advisory Council, who also spoke on the matter insisted that subsidy should be dispensed with.
He disclosed that the just accented Petroleum Industry Act(PIA) essentially makes petrol subsidy illegal .
He stated that the six month period is needed for the new NNPC Ltd and the new regulatory agencies to calibrate themselves. This according to him explains the reasons why the minister said the administration already made provision for the first half of the year.
Professor Salami said, “If we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”