Subsidy Removal: Kyari Opens Up, Says FG Owes NNPCL N2.8 Trillion

By Akinwale Kasali

Following the announcement of Fuel Subsidy Removal by President Bola Tinubu in his inaugural address, long queues in Filing Stations all across the country have appeared. The product is, now, being  sold at the rate of N600 Per liter. And some which some filling stations have closed shop, and refused to sell.

The Nigerian National Petroleum Company Limited, NNPCL has told Nigerians not to engage in panic buying as the products is available.

However, the NNPCL Group Chief Executive Officer,  Mele Kyari, on Tuesday, in Abuja said the Federal Government owes the company N2.8 trillion spent on fuel subsidy.

Kyari, who made this disclosure after a closed door meeting with President Tinubu at the Presidential Villa. Aso Rock, said that the NNPCL is anxiously waiting for the FG to settle the N2.8tn of NNPC’s cash flow from the subsidy regime, and cannot continue to build on this.

Kyari also affirmed the stance of President Tinubu on Subsidy Removal, saying 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 six trillion Naira in 2022, and N3.7tn in 2023, we 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.”

Speaking further, Kyari who said that NNPCL has footed petrol subsidy from its cash flow said the government is unable to payback the N2.8tn spent so far.

“So today the country don’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,” he explained.

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.

He, however, assured Nigerians that the government will initiate measures to cushion the effects of the discontinuation of subsidy.