Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Mele Kyari, has disclosed that the Federal Government is still owing the company N2.8tn it expended on petrol subsidy.
“Today, we are waiting for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” Kyari stated while speaking with State House Correspondents after meeting with President Bola Tinubu at the Presidential Villa, Abuja.
Tinubu, during his inaugural speech on Monday, said he was aware that the 2023 Appropriation Act does not provide for petrol subsidy beyond June; the end of the 18-month extension period approved by ex-President Muhammadu Buhari to end petrol subsidy.
The President, therefore, confirmed that the subsidy will not be continued.
Kyari, who affirmed the President’s stance, argued that the subsidy payment is no longer tenable as it makes it difficult for the company to fund its core businesses.
He said “Since the provision of the N6tn in 2022, and N3.7tn in 2023, we have not have not received any payment whatsoever from the Federation.
“That means they (Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalty, there’s still a balance that we’re funding from our cash flow. And that has become very, very difficult and affecting our other operations.
“We’re not able to keep some of these cash for invest on our core businesses. And the end result is that it can be a huge challenge for the company and we have highlighted this severally to government that they must compensate and NNPC they must pay back an NNPC for the money that we have spent on the subsidy.”
Kyari who said the NNPCL has footed petrol subsidy from its cash flow said the government is unable to reimburse it the N2.8tn spent so far.
He added, “So, today the country doesn’t have the money to pay for subsidy. There’s incremental value that will come from it. But it is not an issue of whether you can do it or not because today we can’t afford it and they are not able to pay our bill. That comes to how much is the federation owing NNPC now.
“Today, we are waiting for them to settle up to N2.8tn of NNPC’s cashflow from the subsidy regime and we can’t continue to build this.”
Kyari said the reemerging petrol queues nationwide are understandable as marketers will like to understand the meaning of the president’s pronouncement that “subsidy is gone.”
He said that the uncertainty on the remark also caused consumers to rush for the product, causing queues.
The NNPCL boss assured Nigerians that the government will initiate measures to cushion the effects of the subsidy discontinuance.
Kyari was also joined by the Chief Executive Officer of Nigerian Mainstream and Downstream Regulatory Authority, Faruk Ahmed, who said the FG will not place any price cap on the sale of petroleum products in the country.
More details to come…