The Group Chief Executive Officer of the Nigeria National Petroleum Commission Limited (NNPC), Mele Kyari, says Nigeria’s subsidy regime ended last year.
President Bola Tinubu had at his inauguration announced that “subsidy” is gone leading to a hike in fuel prices with many wondering why it is so even though it was budgeted for up to the end of June 2023.
But while featuring on Channels Television’s Politics Today, the NNPC boss said subsidy “vanished” early last year based on the provisions of the Petroleum Industry Act (PIA).
“By the provisions of the PIA, actually the subsidy regime vanished on the 17th of February, 2022. The law states that six months after the enactment of the PIA, petroleum products, particularly PMS must be priced at market rates,” he said on Thursday.
“By law, the subsidy regime is gone by February 17, 2022. But of course, the government can always decide to spend on its citizens, in the manner that it wants,” Kyari added.
“There are subsidies on bread, fertiliser, and all kinds of other things all over the world. But the government in its wisdom, decided that there would be an appropriation for subsidy in 2022, and also provision for subsidy till the second half of 2023. That means that provision is made, but the law still applies in the market”.
According to him, the NNPC has since then been paying the subsidy for fuel in the country, a development he said is no longer sustainable.
While admitting that the removal of subsidy and the subsequent hike in the prices of fuel is painful, Kyari noted that the development would be beneficial to Nigerians in the long run.
“It is very painful that this has to happen because the country can no longer afford this subsidy regime. We do not have the money to pay for it,” he stated.