There is no plan to end petrol subsidy for now, the Federal Government said yesterday.
Finance, Budget and National Planning Minister Mrs. Zainab Ahmed said provision has been made for the first six months of next year.
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She explained that subsidy payment would stop since complete deregulation of the downstream oil and gas sector will start by July 2022.
The minister stated this at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja on Monday.
“In the 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry, “ Ahmed said.
“Money to fund petrol subsidy will be drawn from a special account domiciled in the Office of the Accountant General of the Federation (OAGF),” the official explained.
At the event, Prof. Doyin Salami, chairman of the Economic Advisory Council (EAC), described subsidy payment as illegal. Also, Director-General, Debt Management Office(DMO) Patience Oniha told participants that the government has so far issued N1.5 trillion promissory notes to its creditors.
Salami said he had argued for a long time that subsidy needed to go since the Petroleum Industry Act (PIA) made the payment illegal.
The EAC chairman said: “ The PIA essentially makes illegal to pay petrol subsidy. Yes, there is a period where NNPC(Nigerian National Petroleum Corporation) and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is a provision.