NNPC says Abuja owes it N2.8tr that hinders its core businesses
By Jeph Ajobaju, Chief Copy Editor
Mele Kyari, Nigerian National Petroleum Company (NNPC) Chief Executive, has announced the federal government owes the company N2.8 trillion paid for petrol subsidy.
He told journalists after meeting with President Bola Tinubu in Aso Rock that subsidy is no longer sustainable having made it impossible for the NNPC to channel funds into its core businesses.
Kyari said new petrol queues across the country are understandable as marketers will like to understand the meaning of Tinubu’s pronouncement that “subsidy is gone.”
In his view, uncertainty about the pronouncement also caused consumers to rush for the product, causing queues.
Kyari assured the government will initiate measures to cushion the effects of subsidy removal, especially on the poor.
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NNPC cash flow problems
He was joined by Nigerian Mainstream and Downstream Regulatory Authority (MDRA) Chief Executive, Faruk Ahmed, who explained subsidy removal means there is no price cap on fuel products and conversation is ongoing to ensure consumers are not shortchanged.
“Since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, we have not received any payment whatsoever from the federation,” Kyari stressed, per Tribune reporting.
“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 to 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 the NNPC, and must pay back the NNPC for the money that we have spent on 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 N2.8 trillion of NNPC’s cashflow from the subsidy regime and we can’t continue to build this.”