Page 4 - AfrOil Week 03 2022

AfrOil COMMENTARY AfrOil

Gasoline prices in Nigeria are subsidised (Photo: NMDPRA.gov.ng)

Nigeria’s bumpy road

to PIA implementation

A dispute over gasoline subsidies is leading Africa’s biggest oil producer into a political traffic jam

TO date, one of Nigerian President Muham- resolving investors’ questions about the stability
madu Buhari’s biggest accomplishments has of taxation and regulatory regimes. They have
WHAT: been the adoption of the Petroleum Industry also noted that the new law is designed to free up
The president of Nigeria’s Act (PIA), a new law governing the oil and gas budget funding for infrastructure projects and
Senate has indicated sector. domestic programmes by eliminating Nigeria’s
that gasoline subsidies In contrast to the failed and drawn-out long-standing subsidies for gasoline (known
will not be eliminated as efforts of its predecessors, Buhari’s administra- locally as premium motor spirit, or PMS).
planned. tion managed to submit draft legislation to the
National Congress and then secure its passage Ahmed’s roadmap
WHY: through both houses of the legislature in less There was never any reason to believe that Nige-
The price support places than a year. As a result, the president was able ria would accomplish the latter feat without any
major strains on the to sign the bill into law last August, clearing bumps, skids or swerves along the road.
country’s budget. the way for the introduction of a new govern- The PIA lays out a very tight schedule for
ance and operating regime for the industry that abandoning the subsidy, as it calls upon Abuja
WHAT NEXT: accounts for about 10% of the country’s GDP to stop providing artificial support to domestic
Resolving the gasoline and more than 85% of its total export revenue. gasoline prices within six months of its adop-
subsidy dispute is likely
to slow implementation of Nigerian government officials have said they tion. Five months have already passed since
the PIA. hope the adoption of the PIA will help attract Buhari signed the bill, and it is far from clear that
foreign funding for oil and gas projects by the government will meet this deadline.

P4 www. NEWSBASE .com Week 03 19•January•2022