The Major Oil Marketers Association of Nigeria (MOMAN), has sought to clarify the realities of the suspension of fuel subsidy removal.
According to the oil marketers, the suspension of the subsidy removal would likely affect the market. Hence, they need clarification on how their operations would be affected.
The Chairman, MOMAN, Olumide Adeosun, stated that the decision to suspend petrol subsidy removal “does not bode well” for the petroleum downstream sector.
“The members of the association are currently seeking to consult with the Ministry of Petroleum Resources, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, and other industry stakeholders to understand exactly how this decision would impact the other provisions in the Petroleum Industry Act as well as market operations,” he said.
BizWatch Nigeria understands that going by Petroleum Industrial Act (PIA), which President Muhammadu Buhari had signed into law, the fuel subsidy regime in the country was supposed to come to an end in February 2022.
Announcing the suspension of the subsidy removal, the federal government proposed to extend the subsidy removal implementation period by 18 months, saying it would engage the legislature for the amendment of the Petroleum Industry Bill.
FG’s payment projection for fuel subsidy in 2022
Going by the economic realities and dwindling oil prices in the global market, the Nigerian National Petroleum Corporation (NNPC) plans to pay no less than N270 billion on a monthly basis for fuel subsidy.
From N1.43 trilling that was spent on fuel subsidy in 2021, to cushion the effect of economic hardship on Nigerians, the government has projected that the consumption of petroleum products in the country would gulp a total of N3 trillion from its pulse this year.
With this, our correspondent estimated that fuel subsidy in 2022 would increase by 109.79%.
“The Nigerian National Petroleum Company (NNPC) has presented to the ministry a request for N3 trillion as fuel subsidy for 2022. What this means is that we have to make an incremental provision of N2.557 trillion to be able to meet the subsidy requirement, which is averaging about N270 billion per month,” the Minister of Finance, Budget and National Planning, Zainab Ahmed, had stated.
