While arguing that the petrol subsidy should not be removed now, the council said the Federal Government would broaden consultations with state governments and other key stakeholders such as labour unions, petroleum marketers, the Ministry of Finance, Nigerian Upstream Petroleum Regulatory Commission and representatives of incoming administration.

This ‘expanded committee’ would “determine if the removal can be done by June as planned,” it said.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this to State House correspondents shortly after the valedictory NEC meeting presided over by Vice President Yemi Osinbajo at the Council Chambers of the Presidential Villa, Abuja.

She said there might be a need to send a supplementary budget to the National Assembly if the incoming administration aligned with the decision to extend subsidy removal.

According to Ahmed, the Council has however agreed that the subsidy must be “removed now, rather than later,” as the nation cannot afford it anymore.

She said, “Council agreed that the timing of the removal of fuel subsidy should not be now; but that we should continue with all of the preparatory works that need to be done and these preparatory works have to be done in consultation with the states and other key stakeholders including representatives of the incoming administration.

Council agreed that the fuel subsidy must be removed earlier rather than later because it is not sustainable. We cannot afford it anymore. But we have to do it in such a way that the impact of the subsidy is as much as possible, mitigated on the lives of ordinary Nigerians.

“So, this will require looking at alternatives to the fuel subsidy that needs to be planned for and subsequently put in place. But also, what needs to be done to support the people that will be most affected as a result of the removal.”

She noted that the 2023 budget provides for subsidy only up to June 2023. More so, the provisions of the Petroleum Industry Act require the deregulation of several sectors 18 months after the effective date of the subsidy removal.

Therefore, she said the Federal Government had agreed to form an expanded committee to consider the removal process. This includes determining the exact time and the measures to be taken to support the poor and vulnerable and ensure a sufficient supply of petroleum products nationwide.

“So this is a decision that has been taken to expand the committee that is currently working with representatives of the states and it will also have to be engaging with the petroleum marketers.

“The immediate committee comprises the Ministry of Finance, Budget and National Planning, the NNPCL, the regulator, and the downstream and upstream regulators.

“So there’ll be an expanded committee so that it is not just a few people’s thoughts that will guide the process so that there is sufficient consultation taking inputs from key stakeholders on the measures that need to be taken. What I said is that it is not going to be removed now, which means it will not be removed before the transition is completed,” Ahmed said.

The minister noted that the nation would now be operating “two laws in the oil sector.”

However, the incoming administration would have to amend both the Appropriation Act and the PIA to bring them at par with current realities, based on their decisions on the fuel subsidy, she explained.

Ahmed said, “So if the committee’s work, which will include the representatives of the incoming administration determines that the removal can be done by June, the work plan will be designed to exit in June. But if the determination is that the period needs to be extended, that will mean that as a country will have to revisit the Appropriation Act, for example, because the 2023 budget only made provision up to June. So, if we’re extending beyond June, it means we have to revisit the Appropriation Act and do a supplementary or amend the bill and also the PIA.

“These are the reasons why we had to do this consultation with NEC to get input from the governors. They’re going to provide to us their representatives to work together with us to have a defined process that will take us towards the removal. But one thing that is clear is everybody agreed that the subsidy should be removed very quickly, because the cost is only not efficient, but is also not sustainable. And that when the time comes for removal, the removal will be done once and for all.”

Successive administrations have failed to cut or completely remove the subsidy, a socio-politically delicate matter in Africa’s largest economy.

Between January and September 2022, the Federal Government said it spent $7.5bn on fuel subsidy, describing it as an inefficient use of resources stifling Nigeria’s economic potential.

On April 12, 2023, the International Monetary Fund asked Nigeria to cut borrowing, raise revenue by increasing taxes to grow its economy at 3.2 per cent in 2023.

NEC comprising Vice-President Yemi Osinbajo and state governors among others, stated this at its first meeting for the year at the Presidential Villa, Abuja, on Thursday.

The council stated this as a former Head of State, General Abdulsalami Abubakar and the Senior Staff Association of Nigeria Universities strongly warned the Federal Government against removing the subsidy, saying it would worsen poverty in the country.

The warning came amid conflicting reports on whether the Federal Government would fully deregulate the downstream sector by removing fuel subsidy in February or not.

Although the Minister of Finance, Budget and National Planning, Zainab Ahmed, indicated in December last year that the government would remove fuel subsidy by early this year, Senate President Lawan Ahmed said this week that the President, Major General Muhammadu Buhari, had yet to give any approval regarding that.

However, NEC at its meeting presided over by Osinbajo,  affirmed that since the Nigerian National Petroleum Corporation Limited is now a limited liability company, it must be run differently.

The Governor of Nasarawa State, Abdullahi Sule, made the NEC position known to State House correspondents while fielding questions on the outcome of the meeting.

The governor, who was accompanied by his Edo State counterpart, Godwin Obaseki, said it was understandable that provision for subsidy payment was made for only six months in the 2022 budget.

According to him, any decision to remove subsidy will be taken after the budget provision runs its course until June 2022.

Sule noted that even though NEC had been deliberating on the matter, it had yet to take a position on it.

The Nasarawa governor said, “I think in addition to that, what you have to understand is that we (NEC), 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. And the NNPC has now become a limited liability company, as you know. So, the NNPC will run differently. So, if the Minister of Finance, you know, provides (subsidy) for six months, you can understand part of the reason for the provision for six months, before the NNPC entirely takes off; and at that moment, that is when decisions will be made. But I want to correct this impression; it is not the governors who are making recommendations; It is an NEC committee that comprises 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, the Petroleum Industry Act would have fully taken charge, and it will not require any recommendation from anybody.”

On his part, Obaseki noted that Premium Motor Spirit, which sells for N162-165 per litre in Nigeria, was sold 100 per cent higher in other countries.

He said the Federal Government was spending about N2tn on petroleum subsidies, an amount, he said, could have been used for other purposes.

As a result, he said NEC queried why such an arrangement should be allowed to continue.

The governor said, “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. 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. As we have been told, the price 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 per cent of the cost in Nigeria. And the country, as at last year, spent almost N2tn subsidising petroleum products. That is money that could have gone into building roads, money that could have gone into healthcare and education. So for NEC, the arguments have been put out, should we continue this regime of spending money we do not have, to subsidise the living standards of only mostly those who have vehicles? All of these findings were presented to NEC, and NEC has had several deliberations. And the deliberations are still ongoing. So, NEC hasn’t come up with any decision yet. I think recommendations have also been made to the President. That is what I am aware of that has transpired so far,” he said. According to the Edo governor, the NNPC has been unable to remit the expected N200bn into the Federation Account Allocation Committee owing to the payment of fuel subsidy. Well, I’ll put it very succinctly. Last year, the NNPC was supposed to contribute N200bn a month to FAAC for distribution to the states. Because of payment of subsidy, the 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,”

In a statement released on Friday, October 15, the NEC told the protesters to consider other lawful alternative means of engagement as the protest might be hijacked by hoodlums.

The council which highlighted various actions already taken by federal and state governments to address the grievances that led to the 2020 protests, added that the recommendations of panels are already at various stages of implementation, including the setup of victims’ compensation funds.

The statement read “While appreciating the role of lawful peaceful protests in the advancement of public discourse under democratic governance, the National Economic Council strongly advise those planning public protests across the country to mark the anniversary of the #EndSARS,  to consider other lawful alternative means of engagement. This is because of the current security situation across the country and the possibility of such protests being hijacked by armed hoodlums and other opportunistic criminals to cause mayhem at such protest events and venues. Council, therefore, urges the organisers to reconsider their plan. NEC would also like to point out the various actions already taken by Federal and State Governments to address the grievances that led to the 2020 protests. The disbandment of SARS; broad police reforms; establishment of judicial panels of inquiries to investigate allegations of human rights violations by members of the Nigeria Police Force and other security agencies; recommendations of panels which are already at various stages of implementation, including the setup of Victims Compensation Funds from which several victims have received payments of sums awarded to them by the panels; and prosecution of police personnel indicted by the panels. These are commendable actions that ought to be taken to a logical conclusion in a peaceful atmosphere. Organisers of the planned protests should explore the various channels of communication with governments at various levels to advance their positions and avert the breakdown of law and order that may result from such public protests.”

The NEC is presided over by Vice President Yemi Osinbajo, and has the 36 state governors and Ministers in charge of the economy as well as the governor of the Central Bank of Nigeria, CBN, as members.

The meeting comes on the heels of the inauguration of new ministers by President Muhammadu Buhari on Wednesday.

The NEC meeting which is held monthly, deliberates on the coordination of the economic planning efforts and economic programmes of the various levels in government. The council comprises the 36 state governors, the Governor of Central Bank of Nigeria, Minister of Finance, Secretary to the Government of the Federation and other government officials and agencies whose duties hinge on the economy.