Fuel subsidy removal: NNPC backs Tinubu, cautions against panic buying

May 30, (THEWILL) – The Nigeria National Petroleum Company Limited (NNPCL) has thrown its weight behind President Bola Tinubu on his decision to remove subsidy on Premium Motor Spirit (PMS).

Mele Kyari, Group Chief Executive Officer (GCEO) of the NNPC, declared the position to newsmen in Abuja, on Monday.

THEWILL reports that Tinubu had, in his inaugural speech on Monday, said fuel “subsidy can no longer justify its ever-increasing costs in the wake of drying resources. We shall instead re-channel the funds into better investment in public infrastructure, education, health care and jobs that will materially improve the lives of millions.

“We commend the decision of the outgoing administration in phasing out the petrol subsidy regime, which has increasingly favoured the rich more than the poor.”

Reacting to the development, Kyari said the subsidy burden, which has been placed on the NNPCL, is affecting the company’s cash flow and threatening its sustainability plans due to the federal government’s inability to refund the subsidy claims.

He added that NNPC as a limited liability company cannot continue to bear the burden of subsidy on behalf of the federation if it must deliver dividends to its shareholders and be profitable.

“We welcome the decision of the President to announce the removal of subsidy on PMS and this has been the major challenge for NNPC operations.

“We have been funding subsidy from the cash flow of the NNPC since the government is unable to defray the cost of subsidy for the federation. We believe that this will free resources for the NNPC to continue to do the great work that this company is doing for our country and it allows us to continue to function as a commercial entity,” he said.

Kyari assured that the company has over 30 days of PMS storage and supply and appealed to Nigerians not to indulge in panic buying.

Kyari said NNPCL is in discussion with the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to develop a framework for the implementation of the removal of the PMS subsidy as announced by the President.

He added that the company, as the supplier of last resort as mandated by the Petroleum Industry Act (PIA), will continue to ensure the availability of PMS and other petroleum products.