….No Need to Panic Over Removal of PMS Subsidy — NMDPRA
…NNPC says Fuel is available
If Nigerians are to take what the two most critical agencies of government in the downstream sector of the petroleum industry seriously, then, they should not be wary of anything about a possible fuel scarcity even after the announcement of the removal of fuel subsidy by President Bola Ahmed Tinubu.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Company Limited have assured the Nigerian citizens not to worry as there would be enough fuel to go round the country.
According to NMDPRA in a statement said the removal of subsidy by President Bola Ahmed Tinubu is a welcome development. It stated: “ NMDPRA wishes to address concerns regarding the announcement of the removal of subsidy on Premium Motor Spirit (PMS) as announced by President Bola Ahmed Tinubu.
Contrary to speculations and concerns, we assure all Nigerians that there is ample supply of PMS to meet demand as we have taken necessary steps to ensure that the distribution channels remain uninterrupted and fuel is readily available at all filling stations across the country.”
“We are also working closely with NNPC Limited and other key stakeholders to guarantee a smooth transition, avoid any disruptions in supply as well as ensure that consumers are not short-changed in any form.”
“We, therefore, urge all Nigerians to remain calm as we continue to monitor activities and implement measures to enhance transparency and accountability in the petroleum downstream sector.
We reassure all Nigerians that the removal of subsidy on PMS is a step towards building a more sustainable and prosperous future for our nation. We are confident that with your support and cooperation, we will overcome any challenges that may arise during this transition.”
The National Petroleum Company Limited NNPCL while throwing its weight behind the decision by the Federal Government to exit petrol subsidy, assured the general public that there is enough fuel to go round.
President Bola Tinubu in the first policy directive of his administration during his inaugural speech on Monday announced the removal of fuel subsidy.
According to him, a subsidy can no longer justify its ever-increasing costs in the wake of drying resources.
Addressing the press on the issue, Mele Kyari, Group Chief Executive Officer of NNPCL noted that subsidy on Premium Motor Spirit, PMS w has been a burden on the company’s cash flow, but with its removal, it will free up funds to enable optimal operations in the Company.
Reacting to scarcity already being experienced, he assured Nigerians of a sufficient supply of the product, adding that NNPCL is also monitoring all its distribution networks to ensure compliance.
The Centre for the Promotion of Private Enterprise (CPPE) has calculated that the Federal Government can generate a minimum of N10 trillion annually from the removal of fuel subsidy as well as elimination of the Central Bank of Nigeria (CBN)-subsidised foreign exchange window.
The CPPE, in its Economic Agenda for Incoming Administration signed by its chief executive, Dr Muda Yusuf, said there was a need for the incoming government to prioritise macroeconomic stability with emphasis on moderating inflationary pressures, stabilising the exchange rate and boosting economic growth.
According to the CPPE, the elimination of fuel subsidy will save an estimated N7 trillion annually, just as the “elimination of foreign exchange subsidy will unlock a minimum of N3 trillion revenue annually from the sale of CBN forex to the official foreign exchange window.”
The CPPE also called for a foreign exchange policy reform to unlock inflows of capital into the economy, reduce arbitrage in the forex market and improve transparency in the forex allocation.
The new president of Africa’s largest democracy, Nigeria, has used his inaugural address to make a major policy announcement to ease pressure on government finances.
Bola Tinubu said the decades-long subsidy on petroleum products was being scrapped.
“Fuel subsidy is gone,” he told a packed crowd in the capital, Abuja.
He won disputed elections with a promise to renew hope – but he faces tough economic and security challenges.
It is not clear when the new policy will kick in, but ending the subsidy will lead to a rise in the price of petrol and could have a knock on effect on other prices.
Previous Nigerian governments have tried and failed to end the subsidy that was first introduced in the 1970s.
Despite its oil wealth, Nigeria is unable to refine enough crude to meet local demands so it imports petroleum products, which are then sold at a government-set price.
But the subsidy is a huge drain on public finances. Last year it gulped 4.3trn naira ($9.3bn; £7.5bn) and for the first half of this year, 3.36trn naira was budgeted for it.
The new president said the subsidy could no longer be justified and that the funds would instead be spent on public infrastructure and to improve the lives of people.
Olusola Bello
