In the 2012 budget signed by President Goodluck Jonathan on Friday, a provision of N888 billion was made for fuel subsidy which he admitted was due to pressure from the public.
“The initial 2012 Budget proposal assumed full deregulation of the downstream petroleum sector. However, after listening to the voice of Nigerians, we opted for partial subsidy removal. This meant that we had to review the budget’s revenue and expenditure projections to make some provisions amounting to N888 billion in the budget.” He said.
Many Nigerians had engaged in panic buying of petrol at the beginning of this month in anticipation of an announcement of the full subsidy removal by the Federal Government, going by its earlier agreement with organised labour.
Although it was not categorically stated by the president that the policy of 100 per cent subsidy removal has been abandoned, sources at the corridors of power said “there are no serious discussion in that regard anymore” and that the trouble that the administration passed through in January over fuel subsidy was not one that should be desired so soon.
The Nigerian National Petroleum Corporation, NNPC and the Petroleum Products Pricing Regulatory Agency, PPPRA, claimed that over N1.3 trillion was spent on fuel subsidy in 2011, precipitating a public outcry and a public hearing organised by the House of Representatives.
State Commissioners of Finance have already rejected the deductions made in that respect for the months of January and February and have advised their governors to protest it before President Jonathan; as they argued that the figures don’t add up.
They pointed that if about N1.3 trillion was spent in 2011 when a litre of Premium Motor Spirit, petrol, was sold at N 65, why would the subsidy paid by government increase, rather than decrease in 2012 when a litre of petrol sells at N97.