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Fuel subsidy removal: NEC recommends N747bn palliatives for workers, vulnerable

The National Economic Council (NEC) has recommended palliatives for workers and vulnerable groups to ameliorate the harsh effects of fuel subsidy removal.

This followed the directive of President Bola Ahmed Tinubu that the council should come up with interventions.

Governor Bala Mohammed of Bauchi State disclosed this on Thursday after the inaugural NEC meeting, which lasted for more than five and a half hours

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He said the council considered recommendations from the National Salaries Income and Wages Commission to pay N702 billion as cost of living allowance to civil servants as part of the intervention plans.

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 The meeting, held at the Presidential Villa and presided over by Vice President Kashim Shettima, also announced the setting up of a committee to work out, within two weeks, the modalities for organising and distributing the palliatives.

Mohammed, who was joined by four other governors: Dapo Abiodun (Ogun), Dikko Radda (Katsina), Alex Otti (Abia) and Yahaya Bello (Kogi), also said the interventions included a recommended sum, ranging from N23.5bn to N45bn per month, as petroleum allowance for civil servants.

He further disclosed that the council also discussed the possibility of obtaining funds from the World Bank and London partners to implement the programme of Compressed Natural Gas (CNG) for vehicles in the country as part of measures to bring down the price of fuel.

“Various scenarios were given by the presenter on the issue of national salaries, income and wages, and this N702 billion plus was suggested as an allowance for the cost of living adjustment allowance by the organized Labour and the other one is a petroleum allowance.

“The governor of Ogun has told you that there are other allowances here and there, but with regard to Labour, these are some of the few allowances that they have suggested, and that of petroleum, they said will range from N23.5 billion to N45 billion per month, depending on what is in the kitty for distribution or for sharing.

“So, the N702 billion is a suggested sum for Labour to cushion the effect on workers on a new allowance that will be tagged cost of living adjustment allowance,” he explained.

Mohammed revealed that the Council set up a committee to review and come up with a term of reference to organized areas specifically where the palliatives can come and how they will be dispensed to alleviate the problem of workers and other vulnerable groups.

He listed the members of the committee as governor of Kebbi as chairman; Anambra representing the South East geopolitical zone; governor of Benue (North Central), governor of Kaduna (North West); Bauchi (North East), governor of Cross River (South South) and Oyo (South West).

“Other relevant agencies were also included. They comprised a representative of the budget office, a representative of the CBN, a representative of the Office of the Attorney General of the Federation, a representative of NNPC, representatives of TUC and NLC and of course, Rukayat El-Rufai, so that we can sit within two weeks to come up with a recommendation to NEC for a wholistic decision that will be taken immediately to alleviate the problem that may be encountered by the removal of the subsidy,” he added.

The Bauchi governor said the input of the committee on palliatives earlier set up and headed by former Vice President Yemi Osinbajo would not be discarded but integrated into the ongoing process.

Ogun state governor, Dapo Abiosun, in his comments, disclosed that the oil sector represented by the officials of DAPPMAN made suggestions on how to reduce the price of petrol to the Council.

According to him, the body urged the government to reduce the taxes being collected by the NPA, NIMASA and other government agencies on petroleum products.

The governor added that the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, reported that the company noticed that with the subsidy removal, the cost of fuel in the neighbouring countries had jumped up.

He noted that those neighbouring countries have been relying on subsidized fuel from Nigeria.

Abiodun revealed that the NNPCL boss, therefore, suggested that Nigeria begin to export fuel to her neighbours with less capacity to import the product.

“We decided that we would have a subcommittee of NEC on oil and gas that will look at the issues that have been brought to the fore or by the marketers, by the regulator – NNPC – to ensure that we harmonize report back to NEC and if NEC adopts it we will present it to Mr President,” he said.

The governor equally revealed that the price of fuel would drop by N40 when the local refineries begin to work at full capacity.

In his contribution, Governor Dikko Radda of Katsina State said the government had approached the World Bank for more funds for the NG-Cares programme to mitigate the effect of subsidy removal.

Also speaking, Governor Alex Otti of Abia State said NEC looked at the issue of providing legislative support to local automotive manufacturers following a presentation made to it by the National Automotive Design and Development Council.

He stated that some of the local vehicle manufacturers had already gone into the production of CNG and electric automobiles, which can reduce the pressure on petrol, noting the need to support them through legislation.

“It is estimated that if we give legislative support to these companies that about a million jobs from the 50,000 jobs that exist in that industry would be created.

“It was also suggested that the funding that is required by most of these vehicle manufacturers and assemblers shall be made available to them so that we begin to reduce the dependence on PMS and other fossil fuel powered vehicles,” he said.

 

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