Fuel Subsidy Ended In February 2022 – NNPCL

According to information provided by the Nigerian National Petroleum Company Limited (NNPCL), the fuel subsidy program ceased in February 2022.

Mele Kyari, the chief executive officer of NNPCL Group, revealed this in a Channels Television interview.

Mr Kyari responded that the Petroleum Industry Act (PIA) regulations stated that the fuel subsidy regime “vanished” on February 17, 2022, when asked why it was eliminated on May 29 rather than the last week of June.

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.

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“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 added that because the NNPC is now a commercial entity, it is unable to support the subsidy system.

The NNPCL head explained that the conventional belief is that since there is a provision in the Appropriation Act, it indicates that there is a subsidy regime up until the end of June 2023. This is how the government came about at the end of June if the subsidy expired in February 2022.

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.”