The Group Chief Executive Officer (GCEO) of Nigerian National Petroleum Company Limited (NNPCL), Melee Kyari, has revealed that the federal government is facing a substantial fuel subsidy payment deficit of N2.8 trillion.
Kyari, accompanied by Farouk Ahmed, the Chief Executive Officer of the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), addressed journalists following a meeting with President Bola Tinubu in Abuja.
Expressing his support for President Tinubu’s announcement during his inauguration speech regarding the end of the subsidy regime, Kyari emphasised that the current subsidy burden has become unsustainable.
He further explained that this burden has severely hindered the NNPCL’s ability to allocate funds towards its primary operations.
Kyari acknowledged the recent reemergence of petrol queues across the country since Monday and attributed it to the uncertainty surrounding the president’s statement that “subsidy is gone.”
He explained that marketers and consumers are eager to comprehend the implications of this pronouncement, leading to an increase in demand and resulting in queues at fuel stations.
To alleviate the consequences of subsidy removal, the government intends to implement measures to mitigate its impact, the petroleum boss revealed.
Highlighting the financial strain on the NNPCL, Kyari further revealed, “Since the allocation of N6 trillion in 2022 and N3.7 trillion in 2023, we have not received any payment from the Federation. As a result, we have been using the NNPC’s cash flow to support the subsidy, even after fulfilling our fiscal obligations. This situation has become increasingly challenging and is affecting our core operations.”
He continued, “We have repeatedly urged the government to reimburse NNPC for the funds we have expended on the subsidy. Currently, the country lacks the funds to sustain the subsidy. While there may be some incremental value in its continuation, the reality is that we cannot afford it, and the government is unable to settle our bill. As of now, the Federation owes NNPC approximately N2.8 trillion in outstanding cash flow from the subsidy regime. This situation is untenable and cannot persist.”