Business

Petrol subsidy stays till June 2022, says minister •N714b paid in seven months

Published

3 years ago

October 27, 2021

Finance, Budget and National Planning Minister Mrs. Zainab Ahmed

There is no plan to end petrol subsidy for now, the Federal Government said yesterday.

Finance, Budget and National Planning Minister Mrs. Zainab Ahmed said provision has been made for the first six months of next year.

She explained that subsidy payment would stop since complete deregulation of the downstream oil and gas sector will start by July 2022.

The minister stated this at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja on Monday.

“In the 2022 budget, we only factored in subsidy for the first half of the year; the second half of the year, we are looking at complete deregulation of the sector, saving foreign exchange and potentially earning more from the oil and gas industry, “ Ahmed said.

Although The Nation had reported that no specific provision was made for subsidy payment in the 2022 budget, a top official of the Finance Ministry, said yesterday that the government was banking on extra-budgetary expenses for the purpose.

“Money to fund petrol subsidy will be drawn from a special account domiciled in the Office of the Accountant General of the Federation (OAGF),” the official explained.

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At the event, Prof. Doyin Salami, chairman of the Economic Advisory Council (EAC), described subsidy payment as illegal. Also, Director-General, Debt Management Office(DMO) Patience Oniha told participants that the government has so far issued N1.5 trillion promissory notes to its creditors.

Salami said he had argued for a long time that subsidy needed to go since the Petroleum Industry Act (PIA) made the payment illegal.

The EAC chairman said: “ The PIA essentially makes illegal to pay petrol subsidy. Yes, there is a period where NNPC(Nigerian National Petroleum Corporation) and the new regulatory agencies must calibrate themselves, but at the end of this period – and I think it is about six months, which explains why the minister has said for the first half of the year, there is a provision.

“My view will be if we could get it done sooner than that, it will be excellent. It releases money. The key point is simply this: we are now, any which way, at the tail end of that conversation, except if we choose not to obey the law. My sense is we will obey the law and subsidy will be gone.”

NNPC, the only importer of petrol, deducts subsidy payment from oil and gas proceeds due to the federal, state, and local governments since no provision was made for it in the 2021 budget.

In seven months, petrol subsidy payments gulped N714 billion.

Explaining the N1.5 trillion promissory notes issued by government creditors, Oniha, added: “We can’t talk about debt alone, we must also talk about revenues.”

The DMO boss explained that “when you borrow and invest monies wisely, it will enhance growth and development”

She added that that was “why we(government) issued promissory notes of N1.5 trillion approved by the National Assembly. “

Oniha said: “We can’t talk about debt alone; we must also talk about revenues. When you borrow and invest these monies wisely, it will enhance growth and development which is why we have issued promissory notes of N1.5 trillion approved by the National Assembly.”

She noted that “to include any debt data in the country’s debt stock, it has to be approved by the National Assembly and the Federal Executive Council,

The DMO chief admitted that Nigeria’s debt service to revenue is high and should not be at the level that it is. She therefore called for multiple ways of growing revenue to invest in the future.

She said Nigeria’s Debt Management Strategy “provides a framework on how to undertake borrowings in the country”.

Another panelist, Taiwo Oyedele, suggested that “if we want to optimise, we have to harmonise multiple taxation and multiplicity of collection agencies to ensure that revenue collection mechanisms are boosted.”

Oyedele, who is Africa Tax lead at the PwC, disagreed with some policies of the government which allows about 60 MDAs(Ministries, Departments, and Agencies) to generate revenue.

According to him, “it is impossible for that number of agencies to be involved in revenue collection. They should concentrate on providing services.”

The Nation

Related Topics:June Minister Petrol subsidy

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Railway

Lagos Rail Mass Transit part of FG free train ride – NRC

Published

1 day ago

December 21, 2024

Trends Admin

Lagos Rail Mass Transit part of FG free train ride – NRC

The Nigerian Railway Corporation (NRC) has disclosed that the Lagos Rail Mass Transit (LRMT) trains are included in the Federal Government’s free train ride initiative for the Christmas and New Year celebrations.

The LRMT, which currently includes the Phase 1 Blue Line Rail and the Phase 1 of the Red Line Rail, operates under the Lagos Metropolitan Area Transport Authority (LAMATA).

This announcement was made by Ben Iloanusi, the Acting Managing Director of the NRC, during an interview on NTA News TV on Friday, following the launch of the initiative earlier that day.

While Iloanusi stated that Phase 1 of both the Blue Line and Red Line Rail projects are part of the program, LAMATA has yet to confirm this inclusion.

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Iloanusi outlined the other routes benefiting from the scheme, which include the Lagos-Ibadan Train Service, Kaduna-Abuja Train Service, Warri-Itakpe Train Service, Port Harcourt-Aba Train Service, and the Bola Ahmed Tinubu Mass Transit in Lagos. Notably, little was previously known about the Bola Ahmed Tinubu Mass Transit service until this disclosure.

“Let me mention the routes where this free train service is happening. We have the Lagos-Ibadan Train Service, we have the Kaduna-Abuja Train Service, we have the Warri-Itakpe Train Service, we have the Lagos Rail Mass Transit trains, we have the Port Harcourt-Aba Train Service, and we have what we call the Bola Ahmed Tinubu Mass Transit, which is also in Lagos,” he stated.

Iloanusi provided operational updates, stating that passengers nationwide can access free tickets online or, for those unable to do so, at train stations where they will be profiled and validated.

He noted that passengers using NRC-managed services (excluding the Lagos Rail Mass Transit) should reserve tickets via the official website, www.nrc.gov.ng, with a valid ID required. He also advised travelers to plan, arrive on time, and bring valid identification.

Lagos Rail Mass Transit part of FG free train ride – NRC

Business

NNPC denies claim of Port Harcourt refinery shutdown

Published

1 day ago

December 21, 2024

Trends Admin

Port Harcourt refinery

NNPC denies claim of Port Harcourt refinery shutdown

The Nigerian National Petroleum Company Limited (NNPCL) has denied claims in media reports that the newly refurbished Port Harcourt refinery has shut down.

The national oil company denied the claim in a press release issued by its Chief Corporate Communications Officer, Olufemi Soneye, on Saturday.

Soneye said the claim was false and urged Nigerians to disregard it. He stressed that the Port-Harcourt Refinery is fully operational.

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The statement read, “The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to reports in a section of the media alleging that the Old Port Harcourt Refinery which was re-streamed two months ago has been shut down.

“We wish to clarify that such reports are totally false as the refinery is fully operational as verified a few days ago by former Group Managing Directors of NNPC.”

He noted that preparation for the day’s loading operation is currently ongoing, and added that claims of the shutdown are “figments of the imagination of those who want to create artificial scarcity and rip-off Nigerians.”

NNPC denies claim of Port Harcourt refinery shutdown

Business

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

Published

2 days ago

December 20, 2024

Trends Admin

CBN Governor, Olayemi Cardoso

CBN permits BDCs to buy up to $25,000 FX weekly from NFEM

The Central Bank of Nigeria (CBN) has granted Bureau de Change (BDC) operators temporary permission to purchase up to $25,000 weekly in foreign exchange (FX) from the Nigerian Foreign Exchange Market (NFEM).

This move, detailed in a circular dated December 19, 2024, is designed to meet seasonal retail demand for FX during the holiday period.

The circular was signed by T.G. Allu, on behalf of the Acting Director of the Trade and Exchange Department.

The arrangement will be in effect from December 19, 2024, to January 30, 2025.

Under the directive, BDCs may purchase FX from a single Authorized Dealer of their choice, provided they fully fund their accounts before accessing the market.

Transactions to occur at the prevailing NFEM rate

The transactions will occur at the prevailing NFEM rate, and BDCs are required to adhere to a maximum 1% spread when pricing FX for retail end-users.

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All transactions conducted under this scheme must be reported to the CBN’s Trade and Exchange Department.

The circular read in part:

“In order to meet expected seasonal demand for foreign exchange, the CBN is allowing a temporary access for all existing BDCs to the NFEM for the purchase of FX from Authorised Dealers, subject to a weekly cap of USD 25,000.00 (Twenty-five thousand dollars only).

This window will be open between December 19, 2024 to January 30, 2025.

“BDC operators can purchase FX under this arrangement from only one Authorized Dealer of their choice and will be required to fully fund their account before accessing the market at the prevailing NFEM rate. All transactions with BDCs should be reported to the Trade and Exchange department, and a maximum spread of 1% is allowed on the pricing offered by BDCs to retail end-users.”

The CBN assured the general public that PTA (Personal Travel Allowance) and BTA (Business Travel Allowance) remain available through banks for legitimate travel and business needs.”

These transactions are to be conducted at “market-determined exchange rates” within the NFEM framework.

This initiative reflects the CBN’s strategy to stabilize the FX market and manage seasonal surges in demand.