…Announces 30-Day Discount at NNPC Stations, Insists No Return To Subsidy
…NLC, Civil Society Say Measure Drop in Ocean, Seek 6 Months Discount for All
As Nigerians continue to groan over high petrol prices, the Federal Government has rolled out a fresh basket of measures to cushion the effects of the 2023 fuel subsidy removal, insisting that there is no going back to the old subsidy regime.
The latest in the series is a 30-day discount on petrol dispensed by the Nigerian National Petroleum Company Limited, NNPC, announced yesterday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
Speaking at a press briefing yesterday in Abuja, Oyedele said the arrangement is not a return to subsidy, but a special intervention where NNPC will sell at cost, with priority given to public transport operators nationwide.
“We are offering a discount on petrol dispensed by NNPC Limited for the next 30 days in the first instance with priority for public transporters nationwide. So, it’s not a subsidy; the government is just saying we sell to you at cost,” the Minister explained.
The intervention comes as NNPC pump prices hover around N1,355 per litre in Lagos and Rivers and N1,370 in Abuja, with independent marketers selling higher.
The Federal Government yesterday also defended the subsidy removal, saying it did not create a cash windfall but saved Nigeria from bankruptcy and reduced borrowing pressure.
In a detailed explainer, the government said a full year of subsidy in 2023 would have cost N6.7 trillion – 70% of Federal revenue – and was no longer sustainable.
According to the government, savings from subsidy now flow through the Federation Account Allocation Committee (FAAC), increasing allocations to Federal, States and Local Governments, while N6.47 trillion has been ploughed into strategic infrastructure including the Lagos-Calabar Coastal Highway, Sokoto-Badagry and Trans-Sahara Superhighways.
To cushion the impact on households, FG listed its multi-layer palliatives as Cash Transfer: Minister of Humanitarian Affairs, Dr. Bernard Doro, disclosed that over N600 billion has been disbursed in three tranches to 9 million vulnerable households (about 10 million targeted) through the National Social Safety Net.
He also mentioned a temporary wage award of N35,000 for federal workers, later followed by new minimum wage, the CNG Revolution, saying that under the Presidential CNG Initiative (Pi-CNG), FG has launched CNG daughter stations, conversion centres with 8 pits, and the SPROUT programme for 20 Universities.
He noted that over 20 cars and 25 tricycles were being converted daily. To make conversion affordable, according to him, FG partnered CrediCorp, Moniepoint and NCGC to offer conversion on credit at 9% interest, repayable over six months.
The Minister who also said that student loans and grants for tertiary institutions was part of the effect cushioning strategy, maintained that N5 billion palliatives and grains was released to each state, plus fertilizers to farmers.
He added that to cushion the Persian Gulf crisis and rising cost of living, FG slashed import duties on 127 items and introduced Import Adjustment Tax waivers, described by TMSG as “more strategic than bringing back subsidy.”
The government however admitted that a phased removal would have been ideal, but said Nigeria had run out of fiscal space, with net foreign reserves critically low and over $7 billion unmet FX obligations as at May 2023.
“The pains will be temporary, but at the end, we will be better for it,” FG said.
However, the Nigeria Labour Congress, NLC, and civil society say the measures are still a drop in the ocean compared to the over 300% rise in petrol price since May 2023. They want the 30-day discount extended to 6 months and targeted at all Nigerians, not just transporters.
For now, Nigerians will be watching to see if the NNPC discount brings down transport fares in the next 30 days.
