The Nigerian National Petroleum Company Limited (NNPC Ltd) has assured Nigerians that fuel queues in filling stations, following the affirmation of the removal of subsidy, will soon vanished.
Malam Mele Kyari, the Group Chief Executive Officer (GCEO), briefed State House correspondents after meeting President Bola Tinubu on Tuesday at the Presidential Villa, Abuja.
Tinubu, had in his inaugural speech on Monday, commended the past administration for phasing out the petrol subsidy regime, which had increasingly favoured the rich more than the poor.
Kyari said that the Petroleum Industry Act (PIA) stipulated that the price of petroleum should be determined by market forces.
“I know all us must have seen the fuel queues in filling stations across the country.
“It is very understandable that whenever announcements to changes to prices of petroleum happen, both buyers and marketers will like assurance of what exactly this means and typically, consumers will rush to the filling stations to fill their tanks and that is why you are seeing these queues.
“And also for marketers, they will like to see exactly what this means in terms of how are we going to sell the products if subsidy on PMS is removed?
“And the combination of the two is what you are seeing -the obvious dislocation on distribution and we believe that this will go away very quickly.
“And as you may be aware, PIB which was accented in 2021 and became an Act, made it clear that the price of petroleum must be priced at the market,” Kyari stated.
He said, however, that the government also decided to provide for subsidy in the 2022 Appropriation Act and also for half year in 2023.
According to him, while the PIA is clear that petroleum should be priced, but it did not say that government cannot put its money in any way it wants.
“Therefore, we, as a commercial company established by the PIA, we are doing it strictly as business; delivering value as supply of last resort by virtue of the law but at a cost to the federation.
“And that cost includes the cost of subsidy; this subsidy cost should have been money that will be given to the NNPC, may be on monthly or daily basis.
“However, since the provision of the N6 trillion in 2022 and N3.7 trillion in 2023, we have not received no payment whatsoever from the federation; that means they are unable to pay and we continue and continue to support the subsidy from the cash flow of the NNPC.”
He also explained further:“That is when we net off our physical obligations of taxes and royalties, there is still a balance we are funding from our cash flow and that has become very difficult, and it affects our other operations.
“We are not able to keep some of this cash to invest in our core businesses and the end result is that it can be a huge challenge for the company.
“And we have highlighted this severally to government; that they must compensate NNPC; they must pay NNPC for the money we have spent on subsidy.’’
The NNPC Ltd boss said that by virtue of the law and the Appropriation Act 2023, funding was no longer available while the country could no longer fund the subsidy and no longer able to pay NNPC.
“Therefore, we are pleased to note the president’s commitment to the removal of subsidy because they cannot afford it anymore.
