The Federal Government has said that it will make provision for petrol subsidy as part of its expenditure in the 2022 budget.
This follows the non-resolution of the grey areas and outstanding issues between the federal government and the organized labour on the implementation of the full deregulation of the downstream sector of the oil industry.
This disclosure was made by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari, on Wednesday at a public hearing organised by the Senate Committee on Finance on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Kyari told the lawmakers that although no provision was made for fuel subsidy in 2021, the government is presently consulting with relevant stakeholders to exit the subsidy regime, according to ChannelsTV.
The NNPC boss, however, stated that the process may not be concluded anytime soon, hence the need to reintroduce subsidy in the 2022 budget.
Kyari had earlier while appearing before members of the House of Representatives Committee on Finance for a similar hearing on the 2022-2024 MTEF/FSP, disclosed that Nigeria would stop the importation of petrol, when the Petroleum Industry Act (PIA) comes into full effect, and when the Dangote Refinery kicks off operations.
He also justified the federal government’s decision to take up equity in Dangote Refinery while answering questions, describing it as well thought out as the nation now has a venture that will ensure the production of millions of litres of petrol in the country.
On his part, the Chairman of the Senate Committee on Finance, Adeola Olamilekan, raised a concern about revenue generation to curb borrowing to fund the budget.
The lawmakers also want government agencies to equally focus on revenue generation as they do on spending the government’s money.
What you should know
It can be recalled that in April 2020, the Federal Government announced an end to the fuel subsidy regime as the full deregulation of the downstream sector of the petroleum industry takes effect.
However, the implementation was suspended earlier this year by the federal government to enable it carry out wide consultation with stakeholders and organized labour.
The Federal Government had while explaining why it is still paying fuel subsidy and has delayed the implementation of the full deregulation of the downstream sector of the petroleum industry, said that the need to be considerate to Nigerians and put some structures in place to reduce the impact of price increase as a result of the fuel subsidy removal, necessitated the delay.
Sylva, while justifying the delay, said that the Federal Government is trying to put structures in place to create an alternative that is cheaper and more affordable as well as provide palliatives to Nigerians, who will be impacted by the resultant fuel price increase
