Fakoyejo OlalekanThe Federal Government owes the Nigerian National Petroleum Company (NNPC) Limited N2.8 trillion, the Group Chief Executive Officer of the firm, Mele Kyari, has revealed.
After meeting with President Bola Tinubu on Tuesday, Kyari told State House correspondents that the administration of former President Muhammadu Buhari couldn’t afford to fund subsidy.
This resulted in the NNPC taking up the cost burden, using its cash flows to finance the fuel subsidy, which Tinubu has stated will end.
Prime Business Africa had reported that Tinubu, during his inauguration speech, told Nigerians and the oil and gas industry that the Federal Government will no longer pay for subsidy.
Recall that Kyari had also supported the removal of fuel subsidy after Tinubu made the announcement. He reiterated on Tuesday that with FG owing NNPC N2.8 trillion for unpaid subsidy fees, there’s a need to put an end to it to prevent the debt from rising forward.
“Today, we are waiting for them (federal government) to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime and we can’t continue to build this.
“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 account.
“That means the federal government was unable to pay and we have continued to support this subsidy from the cash flow of the NNPC. That is when we net off our fiscal obligations of taxes and royalties.
“There’s still a balance that we are funding from our cash flow. And that has become very, very difficult and affecting our other operations.
“We are not able to keep some of this cash for investment in 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 the government that they must compensate the NNPC by paying the money that we have spent on the subsidy.
“So today, the country does not have the money to pay for the subsidy. There is an 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 bills. That comes to how the federation is owing NNPC now,” Kyari said.
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