The Nigerian National Petroleum Company Limited (NNPC Ltd) says the decision to remove subsidy on Premium Motor Spirit (PMS) known as fuel by President Bola Tinubu is a welcome development.

Malam Mele Kyari, Group Chief Executive Officer (GCEO), NNPC Ltd. made this known at the NNPC Ltd. Towers in Abuja while briefing the newsmen late Monday night after the pronouncement by the President.

The News Agency of Nigeria (NAN) reports that 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.

Kyari, while addressing the newsmen 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 to 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 the PMS, adding that the company has over 30 days of PMS storage and supply.

“There is no reason to panic, we understand that people will be scared of potential changes in the price of petrol, but that is not enough for people to rush to buy more than they need,’’ he added.

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 PMS and other petroleum products.

According to him, the 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 a framework for the implementation of the removal of the PMS subsidy as announced by the President.

President Bola Tinubu, on Monday, in Abuja, announced that his administration will remove the subsidy on Petroleum products.

“Subsidy is gone” Tinubu exclaimed during his inaugural address at Eagle Square, Abuja, shortly after he was sworn in as the 16th President of Nigeria.

The president said there was no provision for subsidy in the national budget from June 2023 and, therefore, it stands removed.

Speaking at his inauguration, Tinubu, on Monday, in Abuja, stated that his administration targets minimum GDP growth of six per cent annually.

He also promised to will lead the country with “compassion and amity towards all.”

“In economy, we’ll target not less than 6 per cent growth in GDP growth. We’ll do this through budgetary reforms. We’ll use a full range of domestic manufacturing and lessen importation,” Tinubu said in his inaugural address at Eagle Square, Abuja.

He promised to boost foreign direct investment by reviewing all complaints about multiple taxations.

“To our foreign investors, our government will review all complaints about multiple taxations. All businesses will be allowed to repatriate hard-earned profits back home,” Tinubu added.

About an hour earlier, the former Lagos Governor had taken the oath of office as the 16th President of Nigeria alongside Vice President Kashim Shettima.

The Senate has amended the Central Bank of Nigeria (CBN) act — increasing the “ways and means borrowing” threshold for the federal government.

During an emergency session held on Saturday, the senate raised the limit from a 5 percent threshold to a maximum of 15 percent that the government can get from the CBN.

Ways and means is a loan facility through which the CBN finances the government’s budget shortfalls.

The facility allows the government to borrow from the apex bank if it needs short-term or emergency finance to fund important projects.

According to Ibrahim Gobir, senate leader, the amendment was necessary to “enable the federal government to meet its immediate and future obligation in the approval of the ways and means by the national assembly and advances by the CBN”.

“Mr President, my respected colleagues, permit me to lead the debate on this bill which seeks to amend the Central Bank of Nigeria (CBN) act to increase the total CBN advances to the federal government from 5 percent to a maximum of 15 percent,” Gobir said.

“The bill was read for the first time in this chamber on Wednesday, 24th May, -2023.

“The very essence of this bill my respected colleagues is to enable the federal government to meet its immediate and future obligation in the approval of the ways and means by the National Assembly and advances to the federal government by the Central Bank of Nigeria.

“This amendment is very consequential and it needs the support of us all. This is to enable the federal government to embark on very important projects that will inflate and rejig the economy.

“I, therefore, urge you all to support the passage of this bill.”

Section 38 of the CBN act, 2007, stipulates that the total amount of ways and means advances outstanding shall not at any time exceed 5 percent of the previous year’s actual revenue of the federal government.

But the federal government’s borrowings from the apex bank have repeatedly exceeded the 5 percent threshold.

“All advances shall be repaid as soon as possible and shall, in any event, be repayable by the end of the federal government financial year in which they are granted and if such advances remain unpaid at the end of the year, the power of the bank to grant such further advances in any subsequent year shall not be exercisable, unless the outstanding advances have been repaid,” the act reads in part.