Nigerian National Petroleum Company Limited (NNPCL) has revealed that the petroleum subsidy regime ended in February 2022.
NNPCL Group Chief Executive Officer, Mele Kyari, disclosed this during an interview on Channels Television.
When asked why petroleum subsidy was removed on Monday, May 29, 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.
He said “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.
“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.”
Kyari also said that the NNPC is now a commercial entity and can no longer fund the subsidy regime.
On how the government came about the end of June if the subsidy ended in February 2022, the NNPCL boss said 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.
Kyari said "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.
“And the government did not fund the subsidy because it didn’t have the money to fund it.”