Sunday, December 5, 2021

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Fuel subsidy to continue till 2022 – FG

The Nigerian National Petroleum Corporation (NNPC) has foreclosed immediate plans to suspend the price stabilisation initiative, noting that the subsidization of petrol products will not be abandoned.

NNPC Group Managing Director, Mallam Mele Kyari, stated this in his presentation at an interactive session by the Joint Senate Committee on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) at the National Assembly in Abuja on Wednesday.

He noted that the corporation would have to continue with fuel subsidy till 2022 and, as such, has made provisions for it in the 2022 AppropriationBill.

‘‘There is an ongoing process that is engaging  members of the organised labour, civil society organisations and many other institutions of government  and other critical stakeholders  to arrive at a landing on how and when we can exit the subsidy regime to be very precise,” he said.

Kyari added that the government is not sure that it can conclude the process  of exiting the subsidy regime before the end of 2021 or early 2022, hence the provision of fuel subsidy in the 2022 Appropriation.

Stakeholders have faulted the N150 billion spent monthly on fuel subsidy, saying it was illegal because there was no provision for such in the 2021 Budget.

On smuggling, he explained that concerted efforts by NNPC and some federal agencies to combat the menace of smuggling of petroleum products have been largely hampered by existing arbitrage fueled by the prevailing huge price differentials in pump price of petrol in Nigeria and neighbouring countries.

He said with a price difference of over N100 per litre between what is sold in Nigeria and in countries around the nation, it was difficult to cage the activities of petrol smugglers.

The NNPC boss said, though the Corporation is working in concert with other agencies, it has made noticeable progress in combating the menace.

“As long as there is arbitrage between the price that you sell and what is obtainable elsewhere, you can be sure that it is very difficult to contain the situation,” he said.

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