CONTEXT
The pronouncement by Bola Tinubu, the newly sworn-in president of Nigeria, on the removal of fuel subsidy sent ripples throughout the country and in particular, the oil and gas sector.
Tinubu in his inaugural speech had said that subsidies on petroleum were not captured in the 2023 budget, and hence will cease to be. He stated that funds meant for subsidies will be diverted to other things like public infrastructure, education, health care and jobs.
“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.
“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,”
Nigerians on social media especially Twitter, blamed Tinubu for unilaterally removing fuel subsidy.
VERIFICATION
CDD War Room investigated and found that the outgoing administration of Muhammadu Buhari had laid the groundwork for subsidy removal.
Buhari, signed the Petroleum Industry Bill (PIB) into law in 2021, 20 years after it was first introduced during the administration of former president Olusegun Obasanjo.
The PIB contains 5 chapters, including governance and institutions, administration, host communities’ development, petroleum industry fiscal framework and miscellaneous provisions in 319 clauses and 8 schedules.
The PIB further provides for complete deregulation of the sector and the abolition of fuel subsidy payment.
However, the government suspended its implementation to June 2023 due to public outcry.
ThisDay, one of Nigeria’s leading newspapers, reports that the federal government made provisions for fuel subsidy payment until June 30, 2023. This information was shared by then minister of Finance Budget and National Planning, Zainab Ahmed, who said that N3trn was budgeted for subsidy payment as the government plans a phase by phase subsidy removal.
Ahmed explained that the removal of the subsidy will likely take effect in June because the Petroleum Industry Act, PIA and the 2023 budget provided for subsidy payment till June only, hence any extension may require an amendment of the PIA and of the budget.
She, however, said that there was no deadline given for the subsidy removal and that the incoming administration would take decision on when it is possible to do that.
This automatically means that the 2023 appropriation Act has no provision beyond June 2023, hence the expected pronouncement of removal by President Tinubu.
Verdict: Misleading.
Contrary to public opinion, the administration of former president Muhammadu Buhari had already set in motion the removal of fuel subsidy as it didn’t make any budgetary provision beyond June 2023.