Mele Kyari, group chief executive officer (GCEO) of the Nigerian National Petroleum Company (NNPC) Limited, says the federal government still owes the firm the sum of N2.8 trillion spent on petrol subsidy.
Addressing journalists after a meeting with President Bola Tinubu in Abuja, on Tuesday, Kyari said the subsidy payment was no longer sustainable as it hinders the company from funding its core businesses.
“Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime and we can’t continue to build this,” Kyari said.
The GCEO said 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 said the NNPC made the petrol subsidy payments from its cash flow, noting that the government has been unable to pay back the N2.8 trillion spent so far.
“That means they (the federal government) are 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 is still a balance that we are funding from our cash flow.
And that has become very difficult and it is affecting our other operations,” he said.
“We are not able to keep some of the cash to invest 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 and pay back 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 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 cannot afford it and they are not able to pay our bill.
That comes to how much the federation owes the NNPC now.
“Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cash flow from the subsidy regime and we cannot continue to build this.”
TheCable had reported that subsidy payments hit N3.3 trillion in 11 months in the previous year.
For the first half of the year, the immediate past federal government budgeted N3.35 trillion for the energy subsidy, after which it promised the under-recovery payments would stop.
On April 5, the federal government said it secured the sum of $800 million from the World Bank, as part of its post-subsidy palliative plans.
‘WHY THERE ARE QUEUES FOR PETROL ACROSS COUNTRY’
Kyari reiterated that the re-emergence of nationwide petrol lines is understandable as marketers would like to understand the meaning of the president’s pronouncement that “subsidy is gone.”
He said the uncertainty on the remark also caused consumers to rush for the product, causing queues.
The NNPC GCEO assured Nigerians that the government will initiate measures to cushion the effects of the subsidy removal in June.