Despite the signing of the Petroleum Industry Act (PIA) and the anticipated full deregulation on the downstream sector, the federal government will make provision for subsidy in 2022, Nigerian National Petroleum Corporation (NNPC) has said.
NNPC group managing director, Mr Mele Kyari, disclosed this 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).
Although no provision was made for fuel subsidy in 2021, he informed the lawmakers that the government had begun a conversation with relevant stakeholders to exit the subsidy regime.
The NNPC chief, however, stated that the process may not be concluded anytime soon, hence the need to reintroduce subsidy in the 2022 budget.
The federal government is projecting N900 billion for fuel subsidy for 2022.
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.
The Senate is holding a three-day public hearing on the 2022-2024 MTEF/FSP, as part of processes to prepare the 2022 budget.
MTEF sets parameters with which the budget is prepared, including the borrowing plan of the government as it proposes $57 per barrel as crude price and 1.88 million barrels daily oil production.
The NNPC boss had last week Wednesday, appeared before members of the House of Representatives Committee on Finance for a similar hearing on the 2022-2024 MTEF/FSP.
At the session, he disclosed that Nigeria would stop the importation of Premium Motor Spirit (PMS), popularly known as petrol, when the Petroleum Industry Act (PIA) comes into full effect, and when the Dangote Refinery kicks off operations.
Kyari, who also responded to questions on the Dangote Refinery, justified the Federal government’s equity share in the plant.
According to him, taking equity in Dangote Refinery was well thought out as the nation now has a venture that will ensure the production of millions of litres of petrol in the country.