The Federal Government has explained why it is still paying fuel subsidy and has delayed the implementation of the full deregulation of the downstream sector of the petroleum industry.
The government in its explanation said that the need to be considerate to Nigerians and put some structures in place to reduce the impact of price increase as a result of the fuel subsidy removal, necessitated the delay.
This disclosure was made by the Minister of State for Petroleum Resources, Timipre Sylva, on Thursday, August 5, 2021, while speaking as a guest at a Channels Television programme, Politics Today.
Sylva, while justifying the delay, said that the Federal Government is trying to put structures in place to create an alternative that is cheaper and more affordable as well as provide palliatives to Nigerians, who will be impacted by the resultant fuel price increase
What the Minister of State for Petroleum is saying
The Minister said that the Federal Government is being considerate of its citizens and cannot give a date or timeline for the removal of the fuel subsidy.
Sylva, while answering a question on the issue of fuel subsidy and whether the government has the muscle to stop paying the subsidy, said, “Of course we have the muscle but you see like you said we must be considerate of our people as well, you cannot say because you have the muscle, box everybody down in the room. So, what we are saying is that before doing this, we need to put some structures in place so that the impact on the people can be minimized.
“We are trying to create an alternative that is cheaper, which is more affordable. So that structure is being put in place. We also think that maybe there will be need for some kind of palliatives. So we are looking at that wholly so you don’t have a timeline on dates to stop paying subsidy.’’
“I cannot give you a date for now. But the Vice President is actually leading the efforts and very soon, we will tell Nigerians what date the removal of subsidy will kick in.’’
He said the government is also making efforts to put structures in place to cushion the effect of the eventual subsidy removal.
What you should know
- It can be recalled that in April 2020, the Federal Government announced an end to the fuel subsidy regime as the full deregulation of the downstream sector of the petroleum industry takes effect.
- The impact of the policy on Nigerians was not felt at that time due to the crash in global oil prices. However, with the increase in oil prices, fuel prices rose sharply with the attendant protest by Nigerians and organized labour and a return to the payment of subsidy.
- The Federal Government earlier this year suspended the implementation of the fuel subsidy to enable it carry out wide consultations with stakeholders and organized labour before reaching a final decision on the issue.