Mele Kyari, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Company Limited (NNPCL), said the Federal Government has a subsidy payment deficit of N2.8 trillion owed to the company.
The Chief of Staff, Abba Kyari, addressed reporters at the Presidential Villa in Abuja following a meeting with President Bola Tinubu.
Kyari confirmed the President’s announcement in his inauguration speech that the subsidy regime would come to an end, stating that it was a necessary move as the current system was no longer viable.
During a recent briefing, the Nigerian National Petroleum Corporation’s (NNPCL) Group Managing Director, Mele Kyari, expressed concern over the significant subsidy burden that has hindered the corporation’s ability to allocate funds towards its primary operations.
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Kyari was accompanied by Farouk Ahmed, the Authority Chief Executive Officer of the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Petrol queues have reappeared across the country since Monday, prompting observations from concerned citizens. According to one individual, the queues are understandable as fuel marketers are seeking to comprehend the implications of the president’s recent announcement that “subsidy is gone.”
According to the source, the ambiguity surrounding the statement has led to a surge in demand for the product, resulting in long lines at gas stations. The government has reportedly pledged to implement measures to alleviate the impact of the subsidy removal.
According to his statement, no payment has been received from the Federation since the allocation of N6 trillion in 2022 and N3.7 trillion in 2023.
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According to sources, the Federal Government has reportedly been unable to fulfil its financial obligations, resulting in the Nigerian National Petroleum Corporation (NNPC) providing financial support for the subsidy. Despite fulfilling our fiscal obligations of taxes and royalty, we are still left with a balance that is being funded from our cash flow, which has become a challenging situation and is impacting our other operations.
The company is facing a significant challenge as it is unable to retain a portion of its cash for investment in its core businesses. The issue has been brought to the attention of the government multiple times, with the company emphasising the need for compensation and reimbursement from the NNPC for the funds expended on the subsidy.
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Today, the nation is facing a financial shortfall that has made it impossible to fund subsidies. The initiative is expected to yield a gradual increase in value. The matter at hand is not a question of capability, as the current circumstances do not permit such an expense and the other party is unable to settle their outstanding balance. The question at hand is the current amount owed by the federation to NNPC.
Today, there is anticipation for the settlement of up to N2.8 trillion of NNPC’s cashflow from the subsidy regime. The ongoing delay in this settlement is hindering further progress.
