Nigerian government plans national summit on oil subsidy removal

Minister of Finance and National Planning Zainab Ahmed said the Federal Executive Council (FEC) had given its approval to a planned summit of government, leaders of all political parties and relevant groups to discuss and agree on the removal of the oil subsidy.

Ms. Ahmed revealed this Thursday when she appeared before the House of Representatives Ad Hoc Committee investigating the Premium Motor Spirit (PMS) subsidy.

She also said that the government plans to spend N3.35 trillion on subsidies in 2023, which will last until June this year.

Ms. Ahmed said the idea of ​​a national forum to take a decision on oil subsidies was suggested by the leadership of the National Assembly and the organization of the forum was underway.

The minister said the federal government spends N18.6 billion a day on PMS and has spent N6.2 trillion on subsidies between 2013 and 2021.

A whopping 3.35 trillion naira, she said, would be spent in the first six months of next year.

According to the minister, a further breakdown reveals that the government is paying N283.2 for every litre.

"When we spoke with the leadership of parliament, they recommended a national stakeholder forum that will bring together all key stakeholders, including all political party leaders. We reported this to the Federal Executive Council ( and) we got approval for this to be arranged and the government is looking into this.

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“It is necessary to have this as a national discussion. If as a nation we all agree that this PMS subsidy should go away, then we all agree that it should go away. This is not the President the only one who decides, it is not the ministry of finance who proposes. I hope that it will be done very soon, that we will take this decision, ”he said.

Ms Ahmed said the consensus is that the current subsidy regime is not sustainable. According to the Minister, the arbitrage between the price in Nigeria and other neighboring countries is responsible for the high volume of PMS consumed in Nigeria.

She said the government was also concerned about the 64 million liters the country consumes daily, adding that the consensus was that subsidies should be removed.

"The grant in the past has been studied in the past by various bodies and groups, including the National Assembly. Including the executive. There have been several reports, and each of those reports has recommended that this subsidy scheme is not beneficial and that we should get out of it. We still cling to it with all the loopholes in the subsidy scheme.

“We have budgeted for a PMS grant, we have taken it back to FEC time and time again. spent exceeds what is appropriate. NNPC insists that they have a liability of last resort and that they deduct from the income they have generated,” she said.

Committee chairman Ibrahim Aliyu (APC, Sokoto), however, criticized the daily consumption figure given by the minister, calling it exaggerated.

"If we look at the daily truck average of 64 million liters, in 2012 there was a report and the total consumption was estimated at 31 million. It is very difficult to have a 100% increase in 10 years.

“If we use a truck with a capacity of 42,000 liters, if you divide it by 64 million, you will arrive at 1,547 trucks per day, and if you take an average (simple division by 37 states), you have 41 trucks. delivered daily to each state.

“The point, when you talk about daily consumption, Monday to Monday, no holidays….. In fact, during COVID the consumption rate remains the same, I wonder how the minister can accept this kind of figure.

f“If you look at the grant itself, is it for the common man? This grant is for the elite, not for the common man. should have done due diligence to be able to arrive at a relative and acceptable rate of consumption,” he said.

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The APC leaders who then belonged to different opposition parties, including the defunct Action Congress of Nigeria, Congress for Progress...