PIA implementation stalled; FG seeks amendment; denies fear of 2023 election behind the decision

Action to cost Nigeria about N2.5trnlNLC suspends protest, lauds workers, CSOslCBN recommends engagement with the populace, local refining

By Emma Ujah, Abuja Bureau Chief, Victor Young, Johnbosco Agbakwuru & Ediri Ejoh, ABUJA

The Federal Government yesterday explained that the reason for the extension of complete removal of fuel subsidy was as a result of President Mohammadu Buhari’s insistence that all the necessary structures must be put in place to cushion the impact of the removal on the citizens.

The decision is likely to take out about N2.5 trillion from the Federation Account to fund the subsidy for the 18 months duration, going by the 2021 subsidy cost put at N1.7 trillion by the Nigerian National Petroleum Corporation, NNPC.

The suspension of subsidy removal would also mean that the implementation of the Petroleum Industry Act, PIA, which provided for the complete removal of subsidy is now suspended, a development which experts said may jeopardise some expected benefits of the Act, including attraction of private domestic and international capital into the downstream sector of the industry.

President Buhari approved the suspension of the removal of fuel subsidy until further notice following an outcry from labour and prominent Nigerians on the planned subsidy removal.

Organized Labour comprising the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) had opposed the planned removal of subsidy and had directed its 36 state chapters to begin mobilization for nationwide protests from January 27 against the subsidy removal.

Labour said that subsidy removal would worsen the living standards and destroy the livelihoods of Nigerians, especially the poor.

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‘Structures not yet in place, FG plans 18-month subsidy extension’

Addressing State House correspondents, Minister of State for Petroleum Resources, Chief Timipre Sylva, said the structures to reduce the harsh effect of the subsidy removal as pointed out by the President were not yet in place.

The minister, who had earlier met with the President before the briefing, said the executive will propose 18 months extension to National Assembly for the implementation of the PIA that was meant to take off next month.

He said with the President’s intervention, fuel subsidy removal is not on the card, for now, adding that government will continue to engage the leadership of organized labour.

Sylva explained that the suspension is to give all the stakeholders time to ensure that the implementation is carried out in a manner that guarantees that all necessary modalities are in place to cushion the effect of the PMS subsidy removal.

Sylva said: “President Muhammadu Buhari has agreed to an extension of the statutory period for the implementation of the removal of subsidy on petrol (Premium Motor Spirit, PMS) in accordance with extant laws.

“This extension will give all the stakeholders time to ensure that the implementation is carried out in a manner that guarantees that all necessary modalities are in place to cushion the effect of the PMS subsidy removal in line with prevailing economic realities.”

On the likely effects of the subsidy removal on the livelihoods of the poor, Sylva said: “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.”

Commenting on fuel queues that have resurfaced, he advised Nigerians to stop hoarding fuel even as he cautioned against people engaging in panic buying as the government has no plans to remove subsidies now.

He said: “We don’t intend to remove subsidy now. That is why we are making this announcement.”

‘Legal implications for PIA’

Also fielding questions on the possible legal implications after the assent to the PIA by President Buhari, the minister said: “We also see the legal implications.

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 some 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-months extension and then it is up to the National Assembly to look at it and pass the amendment as it sees it.”

Asked if the suspension has something to do with the 2023 elections, he said: “Of course not. As I said, first it’s just the human face of the government. Mr President especially wants certain structures to be in place, and he insisted if we want to remove subsidy, we must make sure that we put every measure in place to protect the suffering masses of Nigeria.

“That is the President’s insistence. So we are now taking steps to ensure that these processes are in place. And this now gets into the labour engagement that you are talking about. We are already talking with Labour, and our discussion with Labour is also around these palliatives and mitigations.

“So all these will have to come together. That’s why we decided at this time, especially since we are running against time, with the legal time-frame approaching very quickly, we thought we should come to you and let you know that we are taking steps to amend the law and to ensure that we are within the law.”

On the possibility of gradual increase, which is not on the table right now, the minister said: “Gradual or increment in whatever guise is not on the table.

“We are going to see how to re-jig 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.”

NLC suspends protest, lauds workers, CSOs

Meanwhile, the Nigeria Labour Congress, NLC, yesterday suspended its planned nationwide protest slated for tomorrow, following the Federal Government’s announcement on Monday that it was shelving the planned removal of subsidy on Premium Motor Spirit, PMS, otherwise known as petrol.

Leaders of NLC at its National Executive Council, NEC, meeting in Abuja, also commended Nigerian workers, masses, civil society organisations, CSOs, allies among others for forcing the government to shelve the planned subsidy removal and its attendant petrol pump price hike.

In a statement signed by the NLC President and General Secretary, Ayuba Wabba and Emmanuel Ugboaja, respectively, among others said: “The policy of removal of petrol subsidy, as we all know, has become a euphemism for a hike in the pump price of petrol.

“The attendant effect of the proposed removal of petrol subsidy would push the pump price of fuel to between N320 and N340 per litre. There is no gainsaying the fact that this would have terribly exacerbated the current scourge of inflation in the country, deepened poverty, heightened social tensions and pushed the country and millions of her poor citizens to the very precipice.

“After a series of statutory organ meetings culminating in a National Executive Council (NEC) meeting which took place on the 17th of December 2021, the Nigeria Labour Congress renewed its traditional position of resisting incessant increases in the pump price of petrol. The NEC went ahead to give directives for the mobilization of workers and citizens for national protests if the Federal Government fails to reverse the planned hike in the pump price of petrol.  

“At the peak of very rigorous mobilization of Nigerians by the Nigeria Labour Congress and a host of her Civil Society allies, the government through the Minister of Finance yesterday, 24th January 2022, made a public announcement reversing the plans to increase petrol pump price. The position of the government was also officially communicated to Congress with calls for further engagement.

“Following the reversal and re-approach by government, the National Executive Council of the Nigeria Labour Congress had an emergency virtual meeting this morning to consider the new position of the government. After vigorous debates, the NEC decided to suspend the planned nationwide protest scheduled for 27th January 2022 and the national protest in Abuja scheduled for 2nd February 2022.

“The leadership of the Congress has communicated this organ 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 provision of petrol at an affordable price for Nigerian workers and people.

“We commend the Nigerian workers and people particularly our civil society allies for their unwavering solidarity and support during this struggle. We sure are stronger together.”

CBN urges robust engagement, local refining

In a related development, the Monetary Policy Committee (MPC) of the Central Bank of Nigeria, CBN, yesterday, advised the Federal Government to engage Nigerians, robustly on the issue of petrol subsidy.

CBN Governor, Mr Godwin Emefiele, who briefed the press at the end of the committee’s meeting, in Abuja, yesterday, also conveyed its suggestion of a gradual approach, while urgently facilitating local refining by private refineries.

He said: “Members (of the MPC) noted the ongoing debate around the removal of subsidy and suggested a robust engagement with the relevant groups in the country and afterwards a gradual approach to ensure its moderate impact on the cost of transportation and energy for individual households and firms.

“Committee also noted the need to encourage the take-off of our private refineries across the country in order to provide alternative competitive local supply source or reduce the need for government intervention to manage prices for domestic consumption.

“The speedy conclusion of the government, gas-powered vehicles’ conversion scheme, and other alternative power sources.”

According to Emefiele, the MPC noted the inexplicable dwindling of oil receipts into the Consolidated Revenue Fund of the nation at a time of high oil prices in the international market.

It urged the Nigerian National Petroleum Corporation (NNPC) to address the issue.

“Members noted the dwindling proceeds from oil sales at a time of rising crude oil prices and noted the need to address the persistent reduction in remittance of oil revenue to the Consolidated Revenue Fund and urged NNPC to address this.”

The governor said that while noting the improved remittances from Diaspora Nigerians, the MPC urged the CBN to initiative more incentives to further the inflow of foreign exchange.

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