A former Governor of Central Bank of Nigeria, Lamido Sanusi, said on Tuesday that petrol imports figures were inflated when global oil prices went up during the administration of President Goodluck Jonathan and the regime of the current President, Major General Muhammadu Buhari (retd.)
Sanusi, who spoke on Tuesday at a panel session during the 27th National Economic Summit in Abuja, said the subsidy on petrol was responsible for the inflated figures.
Until May 2016, when the Federal Government announced a new petrol price band of N135 to N145 per litre of petrol, private marketers imported petrol into the country and were paid subsidy claims by the government in order to keep the pump price lower than the expected open market price of the product.
The Nigerian National Petroleum Corporation, which has been the sole importer of petrol into the country in recent years, has been bearing the subsidy cost. It does the importation through the Direct Purchase Direct Sale arrangement.
Under the DSDP scheme, selected overseas refiners, trading companies and indigenous companies are allocated crude supplies in exchange for the delivery of an equal value of petrol and other refined products to the NNPC.
Petrol subsidy to go June 2022
Meanwhile Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, has announced that complete deregulation of the downstream sector of the oil and gas industry would commence next July 2022.
The Minister, who stated this on Monday at a panel session during the 27th Nigerian Economic Summit (NES#27) in Abuja, said the Federal Government would cater for subsidy on petrol only in the first six months of 2022.
Her words: “In our 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,” she said.
Also speaking at the session, Doyin Salami, Chairman of the economic advisory council (EAC), said he had argued for a long time that the subsidy needed to go. He said that the Petroleum Industry Act (PIA) made the payment of subsidy of petrol illegal.
