Subsidy Removal: NEC considers N702bn allowance for workers

The National Economic Council (NEC) is considering crucial recommendations from the National Salaries Income and Wages Commission on a proposed cost of living allowance amounting to N702 billion for civil servants as part of its intervention plans to alleviate the impact of the discontinuation of petroleum subsidy.

President Bola Tinubu had, at his inaugural address at Eagle Square, Abuja, declared that there would no longer be a petroleum subsidy regime as it was not sustainable.

Governor Bala Mohammed of Bauchi State, who informed State House correspondents about the deliberation last week Thursday, revealed that the proposed intervention measures include a monthly petroleum allowance for civil servants, ranging from N23.5 billion to N45 billion.

This announcement comes just two weeks after the President urged governors to develop concrete palliative measures to alleviate the hardships resulting from the discontinuation of petrol subsidy.

The proposed N702 billion cost of living allowance and the petroleum allowance demonstrate the government’s commitment to supporting civil servants during this transitional period.

These measures aim to mitigate the effects of the subsidy discontinuation and provide relief to workers nationwide.

“Various scenarios were given by the presenter on the issue of national salaries, income and wages and this 702 billion-plus was suggested as an allowance for the cost of living adjustment allowance by the organised Labour and the other one is a petroleum allowance,” the governor said.

The cost of living adjustment allowance constitutes a significant portion of the suggested amount and is intended to address the rising costs of living in the country. The remaining portion is allocated to the petroleum allowance, which aims to compensate workers for the potential fluctuations in fuel prices.

While presenting the recommendations, Mohammed acknowledged that other allowances exist, but the focus of the discussion centred on the specific allowances proposed by organised labour and the petroleum sector.

“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 23.5 billion to 45 billion per month, depending on what is in the kitty for distribution or for sharing,” he said.

He clarified that the suggested N702 billion allowance is not a single lump sum but a collective figure encompassing the cost of living adjustment allowance and the petroleum allowance.

Mohammed also announced the formation of a committee tasked with addressing the potential impact of the removal of fuel subsidy on workers and vulnerable groups across Nigeria.

He expressed the council’s commitment to safeguarding the interests of workers and ensuring their well-being amidst the subsidy removal.

“In addition to the palliative, the government looked at all the issues, challenges and problems holistically and set up a small committee of the council to review and come up with a term of reference to organise areas specifically where this palliative can come from and how it will be dispensed to alleviate the problem of workers and other vulnerable groups,” he explained.

Members of the committee included the Governor of Kebbi State as chairman; Anambra representing the South-East geopolitical zone; Governor of Benue, North-Central; Governor of Kaduna, North-West; Governor of Cross River, South-South; Oyo, South-West; and the Bauchi State Governor representing the North-East.

Other relevant agencies in the committee are the Budget Office, representatives of the Central Bank of Nigeria, the Office of the Attorney-General of the Federation, Nigerian National Petroleum Company Limited, the Trade Union Congress of Nigeria and the Nigeria Labour Congress.

The committee has been given a timeline of two weeks to complete its review and submit its recommendations to the NEC. The goal is to facilitate a prompt and comprehensive decision-making process that will alleviate the potential challenges of removing the petroleum subsidy.