The Federal Government announced that the full removal of fuel subsidies is dependent on 3 factors including, the timeline of new refineries coming online, palliatives to cushions the effects of the removal by the Minister of finance and the full implementation of the autogas policy of the FG.
The disclosure was made on Tuesday by the Minister of State for Petroleum Resources, Timipre Sylva, during a special briefing of State House correspondents on fuel subsidy by the Presidential Communications Team at the Presidential Villa, Abuja.
The Minister added that the President wants to ensure that the subsidy removal does not have too much impact on the people.
What the Minister said:
He revealed that President Buhari believes the removal of subsidy will have an impact on vulnerable Nigerians, adding that it should be mitigated and also believes that certain structures should be put in place prior to the removal of subsidy.
“All those structures are not right now in place, one of those is to ensure that refineries are working, and you are all aware that steps are being taken for all refineries to be functional very soon,” he said.
He added that the Dangote refinery is expected to come on stream at the end of this year, including the Port Harcourt refinery, performing at a capacity, not full capacity at the end of this year.
“Also some modular refineries are expected to come on stream later this year,” he said.
He added that there is discussion of introducing an alternative fuel for cars, in the form of autogas.
“A lot has gone on, even today I briefed the president on autogas, we are hoping in March or April, the conversion processes will begin.
“We promised that 1 million cars will be converted initially and a corresponding amount of filling stations, that is in progress and will happen very soon,” he promised.
“That has to be in place before we take out subsidy we are also looking at palliatives, the Minister of Finance is looking at palliatives for Nigerians.”
He added that all these have to converge before the FG announced the complete removal of subsidy because the President especially wants to ensure that Nigeria that the subsidy removal does not have too much impact on the people.
Recall Nairametrics reported last year on November 24th, the Nigerian Government announced it was offering N5,000 monthly each for about 40 million Nigerians. The amount represents a palliative meant to help recipients alleviate the pain that a full subsidy removal could bring.
The cash for subsidy program is likely to cost the federal government about N2.4 trillion annually if it were to implement it next year as planned. Expectedly, the Nigerian Labour Conference has rejected the offer terming it “Penny wise pound foolish”- a saying for bad financial judgement.