Nigerian Government to withdraw fuel subsidy soon, says Minister

*The Nigeria Labour Congress and affiliated workers’ unions have described the plan to remove petrol subsidy as an attempt to punish the consumers for the government’s inefficiency in the country

Alexander Davis | ConsumerConnect

Stating the principal reason that the Federal Government of Nigeria can no longer afford it, Timipre Sylva, Honourable Minister of State for Petroleum Resources, has disclosed that subsidy on petrol will soon be withdrawn in the country.

Sylva in a media chat Tuesday, May 18 stated that there is no going back on the decision because the government can no longer afford and sustain petrol subsidy.

The Minister, however, noted although the proposed withdrawal of subsidy on petrol would be painful initially, it will pay off for consumers, especially ‘the poor’ in the long run.

The present arrangement, he stated, favours a few rich individuals and firms.

Report indicates that the Nigeria Labour Congress (NLC) and affiliated workers’ unions in the country Tuesday described the plan to remove subsidy as an attempt to punish the consumers for government’s inefficiency.

The Lagos Chamber of Commerce and Industry (LCCI) said although desirable, government needs a stable policy in the petroleum industry, report said.

Sylva, nonetheless, lamented that but for the provision of cash from signature businesses from Marginal Oil fields by the Department of Petroleum Resources (DPR), the shortfall in remittance into the Federal Account April 2021 would have been unbearable for the Federation Account Allocation Committee (FAAC).

On the actual augmentation figure and how long the Department of Petroleum Resources (DPR) will continue to intervene in the process, the Minister said: “I cannot say exactly what the figure is.

“I will have to check with the DPR to get you the figure.

“Of course, you know that the DPR has always contributed to the federation revenue because they collect royalties and so on

“But as to filling the gap, it will not always be there, it is not as if the Nigerian National Petroleum Corporation (NNPC) has said that after last month, they will not be able to. You may not know when next they will announce it.”

He further said, “so, you cannot say that they (DPR) will continue to fill in the gap.

“NNPC announced that they could not make contributions to FAAC and the DPR came to the rescue.

“Luckily the DPR was in the position to step in and the marginal field revenues were used to fill the gap.”

Sylva further clarified the government’s position that “Labour and the Federal Government are not on different pages.

“Even Labour understands but what we have agreed is that we need to have an alternative and the process of putting it in place is what is ongoing.

“Subsidy removal will come with some pains but the question is, can we continue with petroleum subsidy as a country? If we cannot continue, what options do we have?

“Diesel is now deregulated, Kerosine is now deregulated but petrol has defied deregulation. Should we continue with this subsidy?

“The Federal Government does not lack courage, our President does not lack political will.”

He said: “Who is really benefitting from subsidy? It is confusing. Some people are benefitting but certainly not the common man.

“Though it does not really benefit the common man, when you try to remove it, the common man comes out to defend it.

“Now, can we carry on with subsidy if you consider the amount of money swallowed by subsidy? If you want to carry on with subsidy, how do we get the money to fund it?

“The best way out is to take out subsidy because if we don’t, we will continue to beg the question.”

The Minister added: “It was practiced for a few months, but when the prices began to move up, some people started threatening and we had to return to it.

“This is a democracy and having deregulated for a few months, we had to step back because this government has listening ears,” he said.

“The price differential is a major incentive for smuggling and it is very difficult to police the borders. We must find a way out of it; if not, you will continue to keep your price down in Nigeria while the neighbouring countries will continue to feed fat on subsidised fuel from Nigeria.”

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