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Subsidy: Queues grow longer amid uncertainty over take-off date
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Subsidy: Queues grow longer amid uncertainty over take-off date

Queues at petrol stations in Abuja grew longer yesterday as consumers continued their effort to obtain the product at old pump price, even as confusion over the take-off date of

  • PublishedMay 31, 2023

Queues at petrol stations in Abuja grew longer yesterday as consumers continued their effort to obtain the product at old pump price, even as confusion over the take-off date of the full deregulation of the downstream sector of the petroleum industry persisted.

While the “subsidy is gone” remark by President Bola Tinubu appeared to signal the immediate removal of subsidy on petrol, the N3.5 trillion budget announced for subsidy by the Buhari’s administration covers the month of June, 2023.

Checks around the Abuja city centre showed that despite the long queues major marketers continued to sell at N195 per litre. The situation outside the city centre was however different as most outlets operated by major marketers were shut.

Stations operated by independent marketers were opened but sold between N330 and N400 per litre. Expectedly, there were no queues at the stations.

Speaking on the new policy, Group CEO of NNPC Limited, backed the removal of subsidy on petrol by President Bola Tinubu, explaining that

payments for petrol subsidy have been a huge burden on the company’s cash flow.

NNPC Limited was saddled with the payments for subsidy by former President Muhammadu Buhari, with the company carrying the cost in its books as petrol under-recovery.

The company however deducts the cost from the revenue due to the Federation Accounts from the sales of Federation Crude Oil.

Speaking to journalists, Kayri NNPC Limited said “welcome the decision of Mr. President to announce that the subsidy on PMS (premium motor spirit) is over. This has been a major challenge for NNPC continued operations. We have been funding the subsidy from the cash flow of NNPC since the government is unable to defray the cost of the subsidy that is due to the corporation.

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“We believe that this will free up resources for the NNPC to do the great work that this company is doing for our country and it allows us to continue to operate as a commercial entity”.

While assuring consumers that NNPC has enough stock of petrol in the supply system, he appealed the potential change in pump should not be enough reason for people to engage in panic buying.

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