The Nigerian National Petroleum Company (NNPC) Limited has revealed that the federal government still owes the company a staggering sum of N2.8 trillion for the petrol subsidy.
Mele Kyari, the Group Chief Executive Officer (GCEO) of NNPC, made this announcement during a press briefing held after a meeting with President Bola Tinubu on Tuesday.
Kyari emphasized that the continued delay in reimbursing the subsidy payment has become unsustainable, as it significantly hampers NNPC’s ability to finance its core operations.
“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 expressed.
Highlighting the extent of the problem, the GCEO disclosed that despite the allocation of N6 trillion in 2022 and N3.7 trillion in 2023, NNPC has not received any payment from the federation.
Consequently, NNPC has been utilizing its own cash flow to cover the petrol subsidy payments, resulting in an outstanding debt of N2.8 trillion from the government.
Kyari further explained, “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. 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.”
The inability to retain funds for crucial investments in NNPC’s core businesses has emerged as a major challenge for the company. NNPC has repeatedly emphasized the urgent need for the government to compensate and reimburse the funds spent on the subsidy.
Kyari emphasized the current financial constraints faced by the country, stating, “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 cannot afford it, and they are not able to pay our bill. That comes to how much the federation owes the NNPC now.”
Consequently, NNPC is eagerly awaiting the settlement of the outstanding N2.8 trillion from the subsidy regime, as the company cannot sustain the burden any longer. The failure to reimburse this significant amount poses a substantial threat to NNPC’s operations.
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