Subsidy: FG Removes VAT On Diesel For Six Months

Subsidy: FG Removes VAT On Diesel For Six Months

The Federal Government, in an effort to cushion the effects of the recent removal of the fuel subsidy, has declared the removal of the value-added tax (VAT) on diesel for the coming six months.

This announcement was made public by Femi Gbajabiamila, the Chief of Staff to President Bola Tinubu, after the conclusive discussions with the leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC).

Key resolutions from the meeting include:

  1. The approval of a N25,000 provisional wage increment for all treasury-paid federal government workers over a period of six months.
  2. The commitment of the Federal Government to expedite the delivery of Compressed Natural Gas (CNG) buses to mitigate public transportation challenges that have risen from the removal of the PMS subsidy.
  3. A pledge to allocate funds specifically for micro and small-scale enterprises.
  4. An acknowledgment of the 8.57% spike in diesel prices, as reported by the National Bureau of Statistics, with consumers now paying an average of N854.32 per litre, a significant rise from N786.88 per litre from the previous year.
  1. The commencement of payments, by the Federal Government, of N75,000 to 15 million households at N25,000 monthly from October to December 2023.

The National Bureau of Statistics had highlighted a worrying trend in diesel prices which, spurred by a 7.5% VAT and forex challenges, catapulted from N650 per litre to nearly N950. In light of these developments, Bennett Korie, the President of the Natural Oil and Gas Suppliers Association of Nigeria, had emphasized the severe impact of the VAT on diesel, which had propelled pump prices to staggering heights across the nation.

The meeting, which saw the participation of prominent figures including Lagos State Governor, Babajide Sanwo-Olu, Governor Abdulrazak Abdulrahman of Kwara State, and Governor Dapo Abiodun of Ogun State, also touched upon the longstanding issues between the Road Transport Employees Association of Nigeria (RTEAN) and National Union of Road Transport Workers (NURTW) in Lagos State.

Both NLC and TUC are currently deliberating the propositions made by the Federal Government with the aim of potentially halting their planned industrial action, allowing further discussions on the actualization of the aforementioned resolutions.

The Minister of Information and National Orientation, Mallam Mohammed Idris, emphasized the Federal Government’s dedication to addressing these pressing concerns, urging that solutions are more feasible with workers at their stations rather than on strike. The labor delegation, which was headed by NLC President Joe Ajaero and included notable leaders from both NLC and TUC, seemed hopeful for the forthcoming consultations.

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