Buhari, not Tinubu removed fuel subsidy

The pronouncement by President Bola Ahmed Tinubu on the removal of fuel subsidy has sent ripples to Nigeria’s oil and gas sector. Daily Trust reports that President Bola Tinubu in his inauguration speech declared that there would no longer be a petroleum subsidy regime as it is not captured in the current 2023 budget. Mr […]

The pronouncement by President Bola Ahmed Tinubu on the removal of fuel subsidy has sent ripples to Nigeria’s oil and gas sector.

Daily Trust reports that President Bola Tinubu in his inauguration speech declared that there would no longer be a petroleum subsidy regime as it is not captured in the current 2023 budget.

Mr Tinubu stated that funds for subsidies will be diverted to other things like public infrastructure, education, health care and jobs.

“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime which has increasingly favoured the rich more than the poor. Subsidy can no longer justify its ever-increasing costs in the wake of drying resources.

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“We shall, instead, re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions,” the president said.

However, Nigerians on social media, especially Twitter while reacting to the statement blamed Tinubu for unilaterally, removing fuel subsidy.

Verdict: Misleading

Verification

Checks by Daily Trust on Sunday show that contrary to public opinion that President Bola Tinubu removed fuel subsidy, the outgoing administration of President Muhammadu Buhari had already laid the groundwork for subsidy removal.

Daily Trust on Sunday reports that then minister of Finance Budget and National Planning Mrs Zainab Ahmed said the federal government has made provisions for fuel subsidy payment until June 30, 2023.

She said N3trn was budgeted for subsidy payment as it plans a phase by phase removal subsidy.

This automatically means that the 2023 appropriation Act has no provision beyond June 2023, hence the expected pronouncement of removal by President Tinubu.

Daily Trust recalls that at the end of the National Executive Council meeting presided over by Vice President Yemi Osinbajo, Ahmed explained that the removal of the subsidy will likely take effect in June because the Petroleum Industry Act, PIA and the 2023 budget provided subsidy till June, hence any delay may require the amendment of the PIA and the budget provision.

She, however, said that there was no deadline given for the subsidy removal and that the incoming administration would take decision on when it is possible to do that.

Consequently, the pronouncement by President Tinubu was said to have been triggered by briefing on the unavailability of funds for subsidy payments from June 2023.

Background

President Muhammadu Buhari in August 2021 signed the Petroleum Industry Bill (PIB) into law.

The passage of the PIB brought an end to a 20-year wait as the bill was first introduced during the administration of President Olusegun Obasanjo.

In 2018, after the National Assembly passed a harmonised version of the bill — the petroleum industry governance bill (PIGB), President Muhammadu Buhari refused assent due to “legal and constitutional reasons”.

The PIB contains 5 chapters, including governance and institutions, administration, host communities’ development, petroleum industry fiscal framework and miscellaneous provisions in 319 clauses and 8 schedules.

The coming of the PIA provides for complete deregulation of the sector which abolishes fuel subsidy payment.

However, the government suspended its implementation to June 2023 due to public outcry.

Conclusion: Contrary to public opinion, the administration of former president Muhammadu Buhari had already set in motion the removal of fuel subsidy as it didn’t make any budgetary provision beyond June 2023.

This Fact Check is produced in partnership with the Centre for Democracy and Development CDD