The Nigerian National Petroleum Company Limited (NNPCL) on said the petroleum subsidy regime in the country ended in February 2022, going by the provisions of the Petroleum Industry Act (PIA).
The Group Chief Executive Officer, Mele Kyari, disclosed this while speaking during an interview on Channels Television’s Politics Today programme Thursday evening.
President Bola Tinubu, on Monday, in his inaugural address at Eagle Square, Abuja, declared that there would no longer be a petroleum subsidy regime as it was not sustainable.
“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources,” the president said.
Responding to why the petroleum subsidy was removed last Monday rather than the last week of June, Mr Kyari said by the provisions of the Petroleum Industry Act (PIA), the subsidy regime “vanished” on 17th February 2022.
“By the provisions of the Petroleum Industry Act (PIA), the subsidy regime vanished on 17 February 2022. The law states that six months after the enactment of the PIA, petroleum products, particularly PMS must be priced at market rates,” Mr Kyari said.
“That means by law, the subsidy regime is gone by 17 February 2022. But of course, the government can always decide to spend on its citizens, in the manner that it wants.
“There are subsidies on bread, fertilizer, 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 a provision for subsidy up till the half of 2023.
“That means that provision is made, but the law sets the pricing at the market. So you can choose to spend your money which is what the government did. But the government did not fund the subsidy because it didn’t have the money to fund it.”
He added that NNPC is now a commercial entity and by its new design under the PIA, it can no longer fund the subsidy regime.
The NNPCL boss, responding to how the government came about the end of June if the subsidy ended in February 2022 noted that the general understanding is that since there is a provision in the Appropriation Act, it means that there is a subsidy regime up till the end of June 2023.
“…(it’s) technically correct, but budget is budget. You have to fund your budget if you don’t have to fund your budget then it doesn’t exist,” he said.
“And the government did not fund the subsidy because it didn’t have the money to fund it.”