The Nigerian National Petroleum Company Limited (NNPCL) says contrary to speculations, the immediate past government did not make provisions for fuel subsidy in the 2023 budget.
The Group Chief Executive Officer of NNPCL, Mele Kyari, made this known during a meeting with the All Progressives Congress (APC) National Working Committee (NWC) at the party’s secretariat in Abuja on Thursday, June 1.
Kyari said: “There was subsidy in 2022 but in 2023, not a single naira was provided for the purpose of financing the subsidy.
“And ultimately while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to the NNPC.
“For any company, when you have negative N2.8 trillion, there is no company in the whole of Africa that will lend to you, you cannot have receivables.
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“The provision of subsidy is there, but absolutely there is no funding for it.”
Kyari added that it was only on paper and does not exist.
This, he said, was the true situation of things, noting that the Federal Government could no longer bear the burden of fuel subsidy.
The NNPCL boss stated: “If we continue, we will run into defaults and the defaults of NNPC is the default of Nigeria.
“Once NNPC goes into defaults and liquidity, it affects every borrowing done by the country, even the sub-nationals. Your lenders will come back to you and say your country cannot longer pay.”
Kyari added that subsidy constituted a huge amount of money which the country might not be able to survive and pay its debts.
Kyari, while admitting that Nigerians would have problems with the removal of fuel subsidy and that it would impact on inflation, assured that government was working on putting in place palliatives to cushion the effect.
He disclosed that President Bola Tinubu has directed some engagements and some palliatives will be put in place soon.
Kyari added that the market would stabilise with time following the removal of fuel subsidy and the current pump price when other players came in.
“There is a transition going on now and NNPC cannot continue to be sole importer. So, we know that this is going to vanish, the market will stabalise,” he said.
On when the country would have all its four refineries working, the NNPCL boss said there was an ongoing process of rehabilitation of the refineries.
He added that one of the refineries would come on stream before the end of 2023 while the second one would come on stream in 2024 and the third one would follow thereafter.
Kyari stressed that the fuel subsidy regime was gone for good because government could no longer sustain it, adding: “Of course, it is very obvious that we can no longer afford it. Subsidy bills have piled up, the country is not able to settle NNPC for the money we are spending on subsidy.
“And therefore, pricing petroleum at the market is the right thing to do at this point in time and I believe that this would benefit the country in a long time.”
