Zainab Ahmed, minister of finance, budget and national
planning, says the federal government will cater for subsidy on petrol in the
first six months of 2022.
She said this on Monday at a panel session during the 27th
Nigerian Economic Summit (NES#27) in Abuja.
Ahmed said that complete deregulation of the downstream oil
and gas sector will start by July 2022.
In seven months, petrol subsidy payments gulped N714
billion, shrinking monthly revenue accrued to the federation account.
The Nigerian National Petroleum Corporation (NNPC), which is
currently the sole importer of petrol, has been deducting subsidy payments from
oil and gas proceeds due to the three tiers of government since there is no
provision for it in the 2021 budget.
“In our 2022 budget, we only factored in subsidy for the
first half of the year; the second half of the year, we are looking at complete
deregulation of the sector, saving foreign exchange and potentially earning
more from the oil and gas industry,” she said.
Also speaking at the session, Doyin Salami, chairman of the
economic advisory council (EAC), said he had argued for a long time that the
subsidy needed to go.
He said that the Petroleum Industry Act (PIA) made the
payment of subsidy of petrol illegal.
“With the PIA essentially it makes illegal petrol subsidy
and yes, there is a period where NNPC and the new regulatory agencies must
calibrate themselves, but at the end of this period – and I think it is about
six months, which explains why the minister has said for the first half of the
year, there is a provision,” he said.
“My view will be if we could get it done sooner than that,
it will be excellent. It releases money. The key point is simply this: we are
now, any which way, at the tail end of that conversation, except if we choose
not to obey the law. My sense is we will obey the law and subsidy will be
gone.”
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