MRS Zainab Ahmed, Minister of Finance, Budget and National Planning, has told Nigerians that the petrol subsidy will continue, for now until June 2022.
She spoke on behalf of the Federal Government at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja on Monday.
She said subsidy payment would stop once there is complete deregulation of the downstream oil and gas sector by July 2022.
“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.
A top official of the Finance Ministry told Nation Newspaper that the government was banking on extra-budgetary expenses for the purpose.
“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 said.
Prof. Doyin Salami, chairman of the Economic Advisory Council (EAC), who also spoke at the event, affirmed that the Petroleum Industry Act (PIA) makes subsidy payment illegal.
Salami said: “ The PIA essentially makes it 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.
“My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”
Also speaking, the Director-General, Debt Management Office (DMO) Patience Oniha told participants that the government has so far issued N1.5 trillion promissory notes. Explaining further that the N1.5 trillion promissory notes issued by government creditors.
Oniha added: “We can’t talk about debt alone, we must also talk about revenues. When you borrow and invest monies wisely, it will enhance growth and development.
“We can’t talk about debt alone; we must also talk about revenues. When you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promissory notes of N1.5 trillion approved by the National Assembly.”