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Obaseki: NEC still deliberating on recommendations on fuel subsidy removal

Obaseki: NEC still deliberating on recommendations on fuel subsidy removal
January 20
21:13 2022

Godwin Obaseki, governor of Edo, says the National Economic Council (NEC) is still deliberating on recommendations by the ad-hoc committee on fuel subsidy removal.

The governor also added that recommendations “may have been made to President [Muhammadu Buhari]”.

TheCable had reported that the ad-hoc committee recommended full deregulation of PMS prices by February 2022 — raising the price by about N130/140 per litre to N302/litre.

Obaseki said this on Thursday at the end of the NEC’s meeting in Abuja.

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The council’s meeting was chaired by Yemi Osinbajo, vice-president.

Giving his opinion at the end of the meeting, Obaseki pointed out that petroleum sells at a fair price compared to neighbouring countries, adding that the amount spent on subsidy could be channelled to other pressing needs such as infrastructure, education, healthcare.

According to him, the council wondered whether that should be allowed to continue in a situation where it observed only two-thirds of the states of the federation consume the subsidy.

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“As you all know and aware, the issue of subsidy has been one matter that NEC has deliberated on, for more than a year now,” Obaseki said.

“There was an ad-hoc committee, which was set up by NEC headed by Governor El-Rufai that included members of the executive arm of government that worked on recommendations as to what we should do about the costs of PMS locally because as you realise, as has been told us, the cost of PMS in Nigeria today is about N162 per litre.

“Whereas every other country surrounding Nigeria is selling the same product at more than 100% of the cost in Nigeria.

“As for NEC, the arguments remain. Should we continue this regime of spending money we do not have to subsidise the living standards of only mostly those who have vehicles? And when NEC looked at some of the analyses last year, we then realised that less than one-third of the states of this country consume two-thirds of the subsidy.

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“The issue of equity also came up. All of these findings were presented to NEC, and NEC has had several deliberations. And the deliberations are still ongoing. So, no, NEC has not come up with any decision yet. I think recommendations have also been made to the President. That is what I am aware has transpired so far.”

Obaseki further spoke on how the subsidy deductions have affected states and how it is surviving.

“Well, I’ll put it very succinctly. As at last year, NNPC was supposed to contribute N200 billion a month to FAAC for distribution to the states,” he added.

“But because of the payment of subsidy, NNPC was unable to put that money into FAAC for distribution, which means less money going to the States and less money going to the federal government.

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On his part, Abdullahi Sule, governor of Nasarawa state, said it is understandable that the provision for the payment of the subsidy is made after the expiration of the 2022 budget in June as the committee set up for the matter is yet to decide.

“We didn’t make any presentations on this because there has not been a decision. But in reality, all of us Nigerians know that there is now the Petroleum Industry Act. NNPC has now become a limited liability company,” Sule said.

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“NNPC will run differently. So if the Minister of finance provides for six months before NNPC fully takes off, that’s when decisions will be made.

“But I want to make the correction that it is not governors who are making recommendations. It is NEC committee, you know, which comprises of all the other people that are looking at this and no decision has been made and probably by the time a decision will be made, you know, the Petroleum Industry Act would have fully taken charge, and it will not require any recommendation from anybody.”

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