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By Adewale Sanyaolu
Barring any unforeseen circumstances, there are strong indications that the Federal Government may go ahead with its planned removal of fuel subsidy before the end of quarter one of 2022.
This was even as organized labour, represented by the Nigerian Labour Congress (NLC) has warned against planned fresh fuel price increment, saying it has fixed January 27, 2022 for the nationwide protests over the hike.
Zainab Ahmed, Minister of Finance, Budget and National Planning, says the government can no longer sustain petrol subsidy payments which currently stand at about N250 billion monthly.
In its place, the Minister explained that the Federal Government would end fuel subsidy by 2022 and replace it with a N5000-a-month transportation grant to the poorest Nigerians.
“So the Petroleum Industry Act has a provision that all petroleum products must be deregulated. And in the 2022 budget, we made a provision to assume that at the maximum by the end of June, we must exit subsidy,” Ahmed said.
NLC President, Ayuba Wabba, at the weekend, however, called on the Federal Government to have a rethink on developing locally produced fuel rather than the craze for imported fuel.
A member of the Federal Government’s Technical Committee on Fuel and Electricity Tariff Increase, who pleaded anonymity because of the sensitive nature of the policy, told Daily Sun at the weekend that there was no going back on the planned subsidy removal.
The member of the committee, set up by the Federal Government to look at ways of cushioning the effect on fuel price increase, said, from all indications, the policy might take effect before the end of quarter one 2022.
“That means the subsidy removal could happen in January or February. But one thing that is certain is that, there is no going back on that policy.
“On our part, we have made recommendations on how best the government can cushion the effect on the masses. And one of such is providing mass transit buses and trucks which would run on gas. By so doing, this would reduce the impact on the citizens and ultimately crash the cost of food items.
One of the major challenges confronting Nigerians is the high cost of food items occasioned by the escalating transportation cost. But if trucks conveying food items from different parts of the country is crashed, the purchasing power of Nigerians will have more value,’’.
Wabba, however, said: ‘‘An increase in the pump price of the Premium Motor Spirit (PMS) also known as ‘petrol’ by government will further expose Nigerian workers and the generality of the citizenry to acute deprivation, hardship and suffering as it would worsen the already established trend of hyper-inflation in the country.”
The genesis of the crisis in Nigeria’s downstream petroleum sub-sector especially as it relates to the petrol pump price regime could be linked to a policy of importation based pricing template for refined petroleum products as against local production based pricing template.”
For their part, the leadership of Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said it would not support the Federal Government’s full deregulation of the downstream sector of the petroleum industry except domestic refining of petroleum products is guaranteed.
PENGASSAN President, Festus Osifo, insisted that union would only support the deregulation of the downstream if the government is ready to develop local production capacity by rehabilitating the refineries.
Osifo said he used to be a strong supporter of deregulation until the Federal Government began to fail in its promises, resulting in what he described as ‘trust deficit’.
He said: “We have spoken a lot about the advantages of deregulation but have not talked about its disadvantages.
“There is no system in the world where you have a policy direction that has advantages without disadvantages.
We have seen societies grow without capitalism, for example China. It will be very difficult for government to transfer its inefficiency to the masses.”
