The All Progressives Congress presidential candidate, Bola Tinubu, has disclosed that his administration will phase out fuel subsidy if elected during next year’s elections.
Aside from phasing out fuel subsidy, he promised to accelerate full implementation of the Petroleum Industry Act, implement additional favourable policies to attract investment in Deepwater assets within 6 months.
These were contained in his manifesto exclusively obtained by The PUNCH on Friday.
According to him, I will ensure the stability of petroleum product supply by fully deregulating the downstream sector and ensuring that local refinery capacity will meet domestic consumption needs.
He said, “We shall phase out the fuel subsidy yet maintain the underlying social contract between government and the people. We do this by dedicating the money that would have been used on the subsidy to fund targeted infrastructural, agricultural and social welfare programs ranging from road construction to boreholes, public transportation subsidies, and education and healthcare funding programs. In this way, the funds are more directly and better utilised to address urgent social and economic needs.
“Our planned approach will not only mitigate the price effects of deregulation but will also result in the significant expansion of public infrastructure and improvement of public well-being.
“Subsidy removal and deregulation are, however, only part of the solution. To further increase our refining capacity, we shall focus on the rehabilitation of the nation’s refineries and shall consider, as a model, the joint venture partnership arrangements implemented by other leading oil-producing states and global petrochemical firms.”
He added, “We will hasten the implementation of the Petroleum Industry Act and implement favourable policies to stimulate investment in the deep-water assets such as encouraging negotiations regarding signature bonus payment and/or deferral of the payment post development, royalty reliefs amongst others.”
The President, Major General Muhamamdu Buhari (retd)-led had last year said it would remove fuel the subsidy following advice by the International Monetary Fund, and the World Bank.
In its place, the government said about 40 million poor Nigerians would be paid a N5,000 monthly stipend for transportation.
The World Bank had projected that Nigeria would spend about N4tn on petrol subsidy in 2022, as oil marketers also stated that the amount could rise to N6tn going by the rise in the price of crude oil.
The PUNCH had on January 25, 2022, reported that the Federal Government proposed to extend the subsidy removal implementation period by another 18 months.
Minister of State for Petroleum Resources, Timipre Sylva, disclosed this during a special briefing on fuel subsidy organised by the Presidential Communication Team at the Presidential Villa, Abuja.
According to him, the extension will give all stakeholders time to ensure that the implementation is carried out in a manner that ensures all necessary modalities are in place to cushion the effect of the PMS subsidy removal, in line with prevailing economic realities.
Also on March 14, 2022, The PUNCH reports that government is still in negotiations with the organised labour as regards the removal of subsidy.
Officials of the Nigerian National Petroleum Company Limited and the Nigerian Midstream and Downstream Petroleum Regulatory Authority stated that the removal of subsidy on petrol had been an explosive issue.
This, they said had made the government engage in negotiations with the organised labour on the matter despite the persistent rise in the amount being spent on subsidy amidst the recent increase in global crude oil prices.