Nigerian gov’t mulls national summit on oil subsidy removal, says it spends N18.6bn per day on policies

The Minister of Finance and National Planning, zainab ahmedhas said that the Federal Executive Council (FEC) has given its approval for a planned summit of the government, the leadership of all political parties and relevant groups to discuss and agree on the elimination of the oil subsidy. Ms. Ahmed revealed this on Thursday when she appeared before the House Ad Hoc Committee investigating the Premium Motor Spirit (PMS) subsidy. He also said that the government plans to spend N3.35 billion on subsidies in 2023, which will last until June of that year. Ms. Ahmed said that the idea of ​​a national forum to make a decision on the oil subsidy was suggested by the National Assembly leadership and arrangements for the forum are underway. The minister said that the federal government is spending N18.6 billion daily on PMS, and has spent N6.2 billion on subsidies between 2013 and 2021. He said a whopping N3.35 trillion would be spent in the first six months of next year. According to the minister, a further breakdown reveals that the government is paying N283.2 per litre. “When we engaged with the leaders of parliament, they recommended a national stakeholder forum that will bring together all the main stakeholders, including all political party leaders. We reported that in the Federal Executive Council (and) we obtained the approval that it should be organized and the government is analyzing that. “There is a need to have this as a national discussion. If we all agree as a nation that this PMS subsidy needs to go, then we all agree that it needs to go. It is not only the president who decides, it is not the Ministry of Finance that suggests. Hopefully this will be done very soon, that we make that decision,” he said. Ms. Ahmed said that the consensus is that the current subsidy regime is not sustainable. According to the minister, arbitrage between the price in Nigeria and other neighboring countries is responsible for the high volume of PMS consumed in Nigeria. He said the government is equally concerned about the 64 million liters the country consumes daily, adding that the consensus is that the subsidy should be eliminated. “The subsidy in the past has been investigated in the past by various bodies and groups, including the National Assembly. Including the executive. There have been various reports, and each of these reports has recommended that this subsidy regime is not beneficial and we should get out of it. We still maintain it with all the deficiencies that the subsidy regime entails. “We have been making provisions for the PMS subsidy in the budget, we have taken it over and over again in FEC. There are cases where the budget is exceeded because circumstances are constantly changing. What is spent exceeds what is appropriated. NNPC insists that they have a liability as a last resort and deducting from the income they generated,” he stated. However, Committee Chairman Ibrahim Aliyu (APC, Sokoto) criticized the daily consumption figure provided by the Minister, describing it as exaggerated. “If we look at the average daily truck of 64 million liters, in 2012, there was a report and the total consumption was 31 million. It is very difficult to have a 100% increase within 10 years. “If we are using a 42,000-liter capacity truck, if you divide it by 64 million, you will get 1,547 trucks per day, and if you take an average, a simple division among 37 states, you have 41 trucks delivered to each one. daily status. “The point, when you talk about daily consumption, from Monday to Monday, not holidays… In fact, during COVID, the consumption rate remains the same, I wonder how the minister can accept this kind of figure. f”If you look at the subsidy itself, is it for the common man? This subsidy is for the elite, not the common man. This figure is exaggerated and I feel that the ministry should have done due diligence in order to arrive at an acceptable relative consumption rate,” he said. From Jonathan to Buhari: other attempts to eliminate the subsidy In January 2012, former President Goodluck Jonathan announced the removal of the subsidy. The announcement sparked protests across the country until the government was forced to reverse his decision. APC leaders who were then in different opposition parties, including the defunct Nigeria Action Congress, the Congress for Progressives, the All Nigeria People’s Party and the All Great Progressive Alliance, protested against the plan. The House of Representatives also opposed removing the subsidy at the time. He held an emergency session that was called on a Sunday and subsequently denied the Jonathan administration crucial support on the sensitive policy. He called for the reversal of the retail price of gasoline to the initial N65 per litre. After the protest that lasted a few days, Mr. Jonathan was forced to reverse the decision. In 2020, during the COVID-19 lockdown, Nigerian National Petroleum Corporation (NNPC) Group CEO Mele Kyari announced that the government had removed the subsidy. However, with the rise in the price of crude oil, the government continued with the PMS subsidy. In November 2021, the federal government announced its plan to remove the fuel subsidy and replace it with a N5,000 monthly transport subsidy for poor Nigerians. In response, the Nigerian Labor Congress set January 27 and February 2 for protests in 36 states against the removal of subsidies. Once again, the government backed away from eliminating the subsidies. Read More Related News Here Let here it in the comment below if you do have an opinion on this; Nigerian gov’t mulls national summit on oil subsidy removal, says it spends N18.6bn per day on policies