The Federal Government on Tuesday proposed an 18-month delay in implementation of the Petroleum Industry Act (PIA) to enable it to continue with the payment of petroleum subsidy.
The Minister of State for Petroleum Resources, Timipre Sylva, announced the initiative while briefing correspondents at the presidential villa, Abuja, saying that the decision was reached as a result of President Mohammadu Buhari’s insistence that all the necessary structures must be put in place to caution the effect of the subsidy removal.
The government had made subsidy provision in the 2022 budget only up till June with the hope that the PIA will become fully operational by then. Sylva said the decision was reached as a result of President Mohammadu Buhari’s insistence that all the necessary structures must be put in place to cushion the effect of the removal.
He added that the president had approved the suspension of the removal of fuel subsidy until further notice.
The minister said that the government would continue to engage the leadership of the organized Labour who had insisted that the proposed nationwide protest on January 27 against the subsidy removal would still go ahead.
Sylva affirmed that the executive would propose an 18-month extension to the National Assembly for the implementation of the Petroleum Industry Act (PIA), that was meant to commence this February.
Reading from a prepared text, the minister said, “President Muhammadu Buhari has, following engagements with stakeholders, agreed to an extension of the statutory period for the implementation of the removal of subsidy on Premium Motor Spirit (PMS), in line with existing laws.
“The new Petroleum Industry Act (PIA) provides for the unrestricted market pricing for PMS from the effective date.
“However, the PIA also envisaged the potential for supply disruption with its resultant effect on the economy.
“Consequently, it provides for a window of six months from the effective date for government to request the services of NNPC Limited as a supplier of last resort.
“This is to forestall supply disruptions and guide market readiness preparatory to migration to the deregulated pricing regime.
“With assent by the president on August 16, 2021, the PMS subsidy removal was therefore expected to take place effective February 16, 2022.
“However, following extensive consultations with all key stakeholders within and outside the government, it has been agreed that the implementation period for the removal of the subsidy should be extended.
“This extension will give all the stakeholders time to ensure that the implementation is carried out in a manner that ensures all necessary modalities are in place to cushion the effect of the PMS subsidy removal, in line with prevailing economic realities.
“The president assures that his administration will continue to put in place all necessary measures to protect the livelihoods of all Nigerians, especially the most vulnerable.”
Fielding questions, the minister made further clarifications, saying: “We don’t intend to remove subsidy now. That is why are making this announcement.
“We also see the legal implication. There is six months provision in the PIA which will expire in February, and that is why we are coming out to say that before the expiration of this time, as I said earlier, we will engage the legislature.
“We believe that this will go to the legislature. We are applying for amendment of the law so that we would still be within the law.
“We are proposing an 18-month extension but what the National Assembly is going to approve is up to them.
“We would approve an 18-month extension and then it is up to the National Assembly to look at it and pass the amendment as they see it.
“Somebody mentioned here the possibility of gradual increase. That is not on the table. Gradual or increment in whatever guise is not on the table.
“We are going to see how to revive the law. This is not going to be the only amendment to the PIA. A few months ago, the president already proposed an amendment to the law.”
Sylva spoke of the things that should be in place first before the subsidy removal can be implemented, including the revival of refineries, introduction of alternate fuel vehicles and provision of palliatives.
“All those structures are not right now in place. One of those is to ensure that the refineries are working and you’re all aware that steps are being taken for all the refineries to be functional very soon. The Dangote Refinery is expected to come on stream at the end of this year. The Port Harcourt refinery is expected to be performing at a certain capacity, not full capacity, by end of this year. There are some modular re- fineries that are also going to come on stream later this year.
“Also, there is a discussion of introducing an alternate fuel for cars in the form of auto gas and somebody asked what has happened since launching. A lot has gone on there. In fact, even today, if you had noticed, I briefed Mr President on the progress that had been made on auto gas. We are hoping that in March or April, the conversion processes will begin.
“We promised that one million cars would be converted initially, and of course, the corresponding amount of gas filling stations will also be built. That is in progress, and I want to assure you that it will happen very soon. That also has to be in place before we say okay, we want to take out subsidies.
“We’re also looking at palliatives. The Honourable Minister of Finance and her team are looking at possible palliatives for Nigerians as well.
“So, because all these have to converge before we announce the complete removal of subsidy, because Mr. President, especially wants us to ensure that this doesn’t have too much impact on the people, we are now extending the time for subsidy removal.”
Federal Government’s latest position on the removal of subsidy, the Peoples Democratic Party (PDP) alleged that the extension proposed is to enable the All Progressives Congress (APC) to gather more money to fund the 2023 general election.
The national publicity secretary of the main opposition party, Honourable Debo Ologunagba, who made the al- legation in a phone chat with the Nigerian Tribune, accused the ruling party of failing to fulfill its campaign promise of building more petroleum refineries to make fuel import and subsidy payment unnecessary.
The party spokesman said the attempt to amend the PIA is to create more allowance for the APC to stash away funds to influence the election.
The PDP maintained that Buhari failed to keep his promise of building more refineries.
He said, “The real thing we should talk about on the issue of subsidy is that this government came with the promise of change and when they go elected, they changed the promise. One of the promises was that the refineries would come on stream and they would be working in full capacity.
“As a matter of fact, the APC government said it would build new refineries. But as at today, Port Harcourt is between 15 to 25 per cent capacity whenever it comes up Kaduna is completely down.”
On the claim by the APC that it was the PDP successive governments that neglected the nation’s refineries, the party’s spokesman declared: “A bad workman complains about his tools but a hopelessly irredeemable one complains about others.”
“For nearly eight years now, the APC has been complaining about others. In eight years, it has not fulfilled one of its promises. They came in not as a party but as a special purpose vehicle to defraud Nigerians; and having achieved that, they’ve been cashing out.”
He accused the ruling party of encouraging corruption in every sphere. Meanwhile, the Nigeria Labour Congress (NLC) said it had suspended its planned nationwide protest scheduled for tomorrow, January 27, 2022 and the national protest scheduled for February 2, 2022, following the Federal Government’s suspension of its proposed N304 fuel price hike.
NLC in a press statement read to journalists in Abuja by its president, Ayuba Wabba, said “Fellow Nigerian workers and citizens, immediately the Minister of Finance unveiled government’s plans on petrol price, the Nigeria Labour Congress issued a press statement on November 24, 2021 condemning the proposed policy of the government and warned of the dire consequences that would follow the implementation of the policy.
“After a series of statutory organ meetings culminating in a National Executive Council (NEC) meeting which took place on December 17, 2021, the Nigeria Labour Congress renewed its traditional position of resisting incessant increase in the pump price of petrol.
“The NEC went ahead to give directives for the mobilisation of workers and citizens for national protests if the Federal Government refuses to reverse the planned hike in the pump price of petrol.
“Following the reversal and reapproach by government, the National Executive Council of the Nigeria Labour Congress met this morning virtually to consider the new position of the government.
“The NEC after vigorous debates took a decision to suspend the planned nationwide protest scheduled for January 27, 2022 and the national protest scheduled for February 2, 2022.
“The leadership of the congress has communicated this decision to our civil society allies who have stood stoically behind Nigerian workers in our quest for social and economic justice for workers and the downtrodden people of our country.
“Going forward, we will continue to engage with the government on the very critical issues of ensuring local refining of petroleum, creation of sustainable jobs and affordable price of petrol for Nigerian workers and people.
“Finally, we commend the Nigerian workers and people particularly our civil society allies for their unwavering solidarity and support during this struggle.”
