…as FG plans PIA amendment, extends subsidy removal by 18 months
They also stated that the volume of petrol consumed in a particular month was contributory to the amount being spent as subsidy, but insisted that the major factor was the global crude oil price. The subsidy spent on each litre of petrol consumed in Nigeria is therefore recovered by NNPC through its monthly deductions from its remittances to FAAC.
The average cost of Brent crude during the six-month period, according to figures obtained from Statistica, a global statistical firm, was put at $76.4/barrel. The NNPC has been the sole importer of petrol into Nigeria, as other marketers stopped importing the commodity due to their inability to effectively access the United States dollar.
He said, “This is another instance of policy somersault. It also reflects the absence of political will to reform the oil and gas sector. This has been a struggle over the past few decades. Perhaps there are entrenched and powerful interests working against the Petroleum Industry Act. “It is difficult to predict what the succeeding administration will do. Meanwhile, attracting investment into the oil and gas space will be extremely difficult going forward.”
Corroborating this view, private sector stakeholders under the umbrella of the Nigerian Economic Summit Group say the subsidy being paid by the government for Premium Motor Spirit, commonly known as fuel, is not sustainable. He noted that the proposed fuel subsidy removal as stipulated in the PIA would have significant impacts on the economic outlook for 2022.
On his part, the Chairman of the NESG, Asue Ighodalo, disclosed that as at November 2021, 91 million Nigerians were living below the poverty line. The Minister of State for Petroleum Resources, Timipre Sylva, disclosed this to State House correspondents on Tuesday during a special briefing on fuel subsidy at the Presidential Villa, Abuja.
According to Sylva, the extension will give all stakeholders adequate time to carry out the implementation in a way that ensures that all necessary modalities are in place to cushion the effect of the subsidy removal, in line with prevailing economic realities.
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