The National Economic Council (NEC) has agreed that the timing for the removal of fuel subsidy should not be now but that all of the preparatory works should continue in consultation with the States of the Federation and other key stakeholders, including representatives of the incoming administration.
The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to State House correspondents on Thursday after a meeting of the Council presided over by vice president, Yemi Osinbajo, at the Presidential Villa, Abuja.
According to her, the Council agreed that the subsidy must be removed earlier rather than later, and alternatives needed to be planned and put in place to mitigate the impact on ordinary citizens.
The minister further explained that an expanded committee was formed to determine the exact time and measures to be taken to provide support to the poor and vulnerable, and ensure sufficient supply of petroleum products.
She said the committee will engage with representatives from the incoming administration and key stakeholders.
Mrs Ahmed said the budget for the 2023 fiscal year has provision for the subsidy only up to June 2023, and the Petroleum Industry Act requires that all petroleum products must be deregulated 18 months after the effective date of the PM’s removal, which is also up to June 2020.
According to her, the removal of subsidy will not be done before the transition is completed, but if the committee’s determination is that the removal can be done by June, then the plan will be designed to exit as a tool.
She said, “Council agreed that the first subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. We have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians.
“So, this will require looking at alternatives to the post subsidy that needs to be planned for and subsequently put in place but also what needs to be done to support the people that would be most affected as a result of the removal.
“So, we will be working together with representatives of the state, we will have a plan that we will start working on putting the building blocks towards the eventual removal of the fuel subsidy.
“If I May remind the forum, that the budget for 2023 has provision for for subsidy only up to June 2023 and also the Petroleum Industry Act (PIA) has a provision that requires that all petroleum products must be deregulated 18 months after the effective date of the PMs removal and that period is also up to June 2023.”