The Federal Government still owes the Nigerian National Petroleum Company Limited N2.8 trillion, according to Mele Kyari, Group Chief Executive Officer of the company, who was speaking on Tuesday in Abuja.
After meeting with President Bola Tinubu at the Presidential Villa in Abuja, Kyari told State House Correspondents, “We can’t continue to build this while we wait for them to settle up to N2.8tn of NNPC’s cash flow from the subsidy regime.”
The President acknowledged during his inaugural address on Monday that the 2023 appropriations act does not fund petrol subsidies after June, which marks the conclusion of the 18-month transition period for the end of the petrol subsidy that was approved by the Buhari administration.
He subsequently said that the subsidy will not be maintained.
Asserting that the subsidy payment is no longer tenable because it makes it difficult for the company to finance its core businesses, Kyari agreed with the President’s position.
“Since the provision of the N6 trillion in 2022 and the N3.7 trillion in 2023, we have not received any payment of any kind from the Federation,” he declared.
“That indicates that they (the Federal Government) are unable to pay, and we have kept funding this subsidy from the NNPC’s cash flow. In other words, after subtracting our tax and royalties obligations, there is still a balance that we are funding with cash flow. And that’s gotten so difficult that it’s affecting our other business operations.
“We can’t keep all of this money to invest in our main businesses. And as a result, it could pose a significant challenge for the business. We have repeatedly urged the government to make up for this by compensating NNPC and requiring it to reimburse us for the money we spent on the subsidy.
According to Kyari, the government is unable to recoup the N2.8 trillion that has already been spent on fuel subsidies because of its cash flow problems.
Therefore, the nation currently lacks the resources to pay for subsidies. There will be additional value as a result. However, since we are currently unable to afford it and they are unable to pay our bill, it is irrelevant whether you can do it or not. That brings us to the amount the federation currently owes NNPC.
“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,” he said.
The nationwide petrol lines that are starting to reappear, according to Kyari, are understandable because marketers want to know what the president means when he says that “subsidy is gone.”
According to him, consumers rushed for the product as a result of the remark’s uncertainty, creating lines.
The head of NNPCL assured Nigerians that the government would take action to mitigate the effects of the subsidy termination.
Faruk Ahmed, the CEO of the Nigerian Mainstream and Downstream Regulatory Authority, also joined Kyari in declaring that the FG will not impose any price caps on the sale of petroleum products in the nation.
More information is coming.
