FGN owes NNPC N2.8 trillion in subsidy payments, CEO reveals
Group Chief Executive Officer of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has revealed that the Federal Government of Nigeria (FGN) owes the NNPC a staggering N2.8 trillion in subsidy payments.
Kyari made this statement during a press conference held in conjunction with the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), represented by Chief Executive Farouk Ahmed.
The conference took place following a closed-door meeting between Kyari, Ahmed, and President Bola Tinubu at Aso Rock, where Tinubu assumed office.
Kyari explained that due to the outstanding debt owed by the FGN, the NNPC is unable to sustain the payment of subsidies, necessitating the discontinuation of the subsidy regime.
He further noted that the 2023 budget has allocated funds for subsidies until the end of June 2023.
However, the country currently lacks the financial resources to cover these subsidies.
The FGN has not settled the N2.8 trillion owed to the NNPC, leading to the difficult decision of ending the subsidy regime.
The NNPC CEO emphasized that the company cannot continue to bear the burden of subsidy payments without reimbursement from the government.
He stated that since the provision of N6 trillion in 2022 and N3.7 trillion in 2023, the NNPC has not received any payment from the Federation.
Consequently, the NNPC has been using its cashflow to support the subsidy payments, affecting the company’s other operations and hindering investments in core businesses.
Kyari expressed concern about the financial strain this situation imposes on the company and called on the government to compensate the NNPC for the funds spent on subsidies.
He emphasized the importance of repaying the debt owed by the FGN to ensure the stability and growth of the NNPC.
Addressing the press, Farouk Ahmed, Chief Executive of NMDPRA, highlighted the collaborative efforts between his office and the Federal Competition and Consumer Protection Commission (FCCPC) to prevent exploitation of consumers by oil marketers.
Ahmed clarified that there is currently no significant reduction in product availability at various points in the value chain, therefore, justifying the discontinuation of subsidies.
Regarding the importation of petrol, Ahmed stated that licenses would be granted to interested marketers.
He explained that the criteria for granting importation licenses would be similar to those applied to importers of diesel and kerosene.
