For January till June 2022, the Federal Government of Nigeria has said it will cater for subsidy on petrol.
Zainab Ahmed, minister of finance, budget and national planning stated this on Monday at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja.
Ahmed said that complete deregulation of the downstream oil and gas sector will start by July 2022.
The Nigerian National Petroleum Corporation (NNPC), which is currently the sole importer of petrol, has been deducting subsidy payments from oil and gas proceeds due to the three tiers of government since there is no provision for it in the 2021 budget.
“In our 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,” she said.
Also speaking at the session, Doyin Salami, chairman of the economic advisory council (EAC), said he had argued for a long time that the subsidy needed to go.
According to him, the Petroleum Industry Act (PIA) made the payment of subsidy of petrol illegal.
“With the PIA essentially it makes illegal petrol subsidy and yes, there is a period where NNPC 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,” he said.