PIA Confusion: FG to reintroduce subsidy in 2022 budget — Kyari
Despite the focus on market deregulation by Petroleum Industry Act (PIA) signed recently by President Muhamnadu Buhari, the Group Managing Director, Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari has announced plans by the Federal Government to make provision for fuel subsidy in 2022 budget.
According to the PIA, prices of refined petroleum would be determined by the forces of demand and supply while the downstream regulator role is to ensure that operators recoup investment and there is free entry and exit.
Kyari disclosed the plans of the government on Wednesday at a public hearing organised by the Senate Committee on Finance on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).
Although no provision was made for fuel subsidy in 2021, he informed the lawmakers that the government had begun a conversation with relevant stakeholders to exit the subsidy regime.
He, however, stated that the process may not be concluded anytime soon, hence the need to reintroduce subsidy in the 2022 budget.
On his part, the Chairman of the Senate Committee on Finance, Adeola Olamilekan, raised a concern about revenue generation to curb borrowing to fund the budget.
The lawmakers also want government agencies to equally focus on revenue generation as they do on spending the government’s money.
The Senate is holding a three-day public hearing on the 2022-2024 MTEF/FSP, as part of processes to prepare the 2022 budget.
MTEF sets parameters with which the budget is prepared, including the borrowing plan of the government as it proposes $57 per barrel as crude price and 1.88 million barrels daily oil production.
On Wednesday last week, the NNPC boss appeared before members of the House of Representatives Committee on Finance for a similar hearing on the 2022-2024 MTEF/FSP.
At the session, he disclosed that Nigeria would stop the importation of Premium Motor Spirit (PMS), popularly known as petrol, when the Petroleum Industry Act (PIA) comes into full effect, and when the Dangote Refinery kicks off operations.
Kyari, who also responded to questions on the Dangote Refinery, justified the Federal government’s equity share in the plant.
According to him, taking equity in Dangote Refinery was well thought out as the nation now has a venture that will ensure the production of millions of litres of petrol in the country.
