(Updates with extension of fuel subsidy, background)
By Felix Onuah
ABUJA, Jan 25 (Reuters) - Nigeria's government plans to amend its newly-signed oil law to ask parliament for an 18-month extension to keep the current regime of subsidising imported petrol, its junior oil minister said on Tuesday.
The law signed by President Muhammadu Buhari last August contains a provision for elimination of fuel subsidies within six months.
However, labour unions have rejected government's planned hike in pump prices, urging the authorities to speed up work on upgrading the country's four refineries, which have been poorly maintained for decades.
Unions were gearing up for protests across the country on Thursday and another in Abuja on Feb.1.
Many view cheap petrol as one of the few benefits of living in an oil-rich country where graft and inefficiency are ingrained. Nigeria, Africa's largest oil exporter, however imports all its fuel, a sore point for its government.
"It has been agreed that the implementation period for the removal of the subsidy should be extended," Timipre Sylva told reporters in Abuja, adding that parliament will need to approve the extension and amend the law.
In November, the government said subsidy would be eliminated by mid-2022 and replaced with 5,000 naira ($12) in monthly payments to the poorest families, heeding World Bank's call to scrap the payment to cut its deficit, forecasted at 3.42% of gross domestic product this year.
Sylva said the government was not "contemplating removing fuel subsidies," following a meeting with Buhari, who doubles as oil minister.
With a presidential election set for early next year, removing the subsidy would have been a politically sensitive move, which could add fuel to the country's double-digit inflation that limits what the government can do to support the economy.
On Monday, Finance Minister Zainab Ahmed said the government had decided to suspend plans to remove the petrol subsidy because the timing was "problematic" in the face of rising inflation. (Reporting by Felix Onah; Writing by Chijioke Ohuocha; Editing by Jon Boyle, Louise Heavens and Tomasz Janowski)
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