The Chief Executive of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, on Tuesday met with President Bola Tinubu at the Presidential Villa, Abuja, telling correspondents afterwards that the federal government is owing the company the sum of N2.8 trillion that it had already paid on petrol subsidy.
He affirmed that the subsidy is no longer sustainable as it has made it impossible for the company to have funds to channel into its core businesses.
Kyari said the petrol queues that have resurfaced 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 remarks also caused consumers to rush for the product and causing queues.
The NNPCL boss assured that the government will initiate measures to cushion the effects of the removal of subsidy.
Kyari was joined by the Chief Executive of Nigerian Mainstream and Downstream Regulatory Authority, Faruk Ahmed, who also said that with the removal of subsidy, there will be no price cap on the sale of petroleum products in the country just as he said that conversation is ongoing to ensure that consumers are not shortchanged.
The NNPCL Group CEO said, “Since the provision of the N6 trillion in 2022, and N3.7 trillion 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.”
“So, today the country does not 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 N2.8trillion of NNPC’s cashflow from the subsidy regime and we can’t continue to build this.”