"Subsidy has been a major challenge for NNPC's continuous operations."
The Nigerian National Petroleum Company Limited (NNPC Ltd) says the decision to remove subsidy on petrol, popularly called fuel, by President Bola Tinubu is a welcome development.
The Group Chief Executive Officer (GCEO), NNPC Ltd, Mele Kyari, made this known at the NNPC Ltd. Towers in Abuja while briefing journalists late Monday night after the pronouncement by the president.
The News Agency of Nigeria (NAN) reports that Mr Tinubu, at his inauguration as the President of the Federal Republic of Nigeria on Monday, said the subsidy regime will end with the commencement of his administration.
Mr Kyari, while addressing journalists said the removal of the subsidy which had been a burden on NNPC's cash flow, would free up funds to enable optimal operations in the company.
"Subsidy has been a major challenge for NNPC's continuous operations. We believe that this will free up resources to enable us continue to do great work and function as a commercial entity, we welcome this development," he said.
Reacting to queues and scarcity already being experienced, the GCO assured Nigerians of a sufficient supply of products particularly petrol, adding that the company has over 30 days of petrol storage and supply.
"There is no reason to panic, we understand that people will be scared of potential changes in price of petrol, that is not enough for people to rush to buy more than they need," he added.
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He however appealed to Nigerians not to be scared or indulge in panic buying.
He added that the company as the supplier of last resort as mandated by the Petroleum Industry Act (PIA) would continue to ensure the availability of petrol and other petroleum products.
According to him, NNPC Ltd. is also monitoring all its distribution networks to ensure compliance.
"The NNPC Ltd. is in discussion with the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to develop framework for the implementation of the removal of the PMS subsidy as announced by the president.
NAN reports that former President Muhammadu Buhari set June 2023 as the date for the removal of fuel subsidy.
The federal government had explained that if it continues to service the subsidy, the country will spend N6.4 trillion annually.
Mr Buhari's new deadline for removing fuel subsidy will be a month after he hands over to his successor in May 2023, leaving the new leader to deal with any backlash and commotion that may follow the decision.
The government said the Medium Term Expenditure Framework was that if the nation holds on to fuel subsidy as it is designed now, we will be incurring from January to December a subsidy cost of N6.4 trillion.
