Group Managing Director, Nigerian National Petroleum Company (NNPC), Alhaji Mele Kyari has disclosed that the immediate past government did not make provisions for petroleum subsidy in the 2023 budget.
He said this in Abuja when he met with the Senator Abdullahi Adamu-led APC National Working Committee (NWC) at the party’s National Secretariat.
“There was a 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.
“The provision of subsidy is there, but absolutely there is no funding for it,” Kyari said, adding that it was only on paper and does not exist.
“This, he said, was the true situation of things, adding that the federal government could no longer bear the burden of fuel subsidy.
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“If we continue, we will run into defaults and the defaults of NNPC are the defaults 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 can no longer pay,” he said.
The NNPC group chief executive officer added that subsidy constituted a huge amount of money which the country might not be able to survive and pay its debts.
He also revealed that the administration of President Bola Tinubu has concluded an arrangement to have one of the four refineries repaired and operating at an optimal level before the end of the year.
Kyari explained that following the hike in pump price and the resultant effect on commercial fare, the president is working out some palliative measures to ease the pains of Nigerians.
He also added that there is an ongoing process of rehabilitation to ensure one of the refineries is ready this year.
“I’m aware that Mr president has directed some engagements and some palliatives will be put in place. I am very sure this will happen. There is an ongoing process of rehabilitation. One of them will come this year, the second one will come on stream next year and then the third will follow thereafter.
“Of course, it is very obvious that we can no longer afford subsidy. Subsidy bills have piled up. The country is not able to settle NNPC for the money we are spending on subsidy. Therefore pricing this petroleum at the market price is the right thing to do at this point in time and I believe it would benefit the country in the long term,” he said.
He said the Federal Government was struggling to fund subsidies, noting that it was no longer justifiable to continue.
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The development had triggered a 100 per cent hike in transport fares, while long queues resurfaced at fuel stations across Lagos, Abuja, Ilorin, Benin, Asaba, Port Harcourt, Kano, Makurdi and other major cities and urban areas.
To worsen the situation, many outlets shut down their facilities and refused to dispense fuel to motorists, further creating scarcity and panic buying at the fuel stations that were opened to customers.
But Kyari confessed on Thursday said that the country can no longer sustain such an expensive regime.
According to him, over 38 per cent of the total fuel distributed in this country is consumed by four states namely Lagos, Abuja, Kano and Rivers.