Economics 101
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Nigeria’s oil agency reveals it is still owed about N2.8T in outstanding subsidy payments as it revises the price of petrol to N511 a litre
Mele Kyari, the Nigerian Petroleum Producing Corporation Ltd (NNPC) chief executive has said the corporation is still owed N2.8 trillion in outstanding debt as it revised the fuel pump price of petrol, Wednesday.
Following a meeting with “President” Bola Tinubu at the Presidential Villa Aso Rock in the Nigerian capital Abuja, Kyari said the fuel subsidy which cost the country almost a trillion naira will be scrapped. “The reality is that from today the government can no longer afford to pay for fuel subsidies as a nation.” Kyari stated after meeting the new president.
The President, Bola Tinubu, on Wednesday, met with the Special Envoy of the Chinese President, Xi Jinping, and Vice Chairman of the Standing Committee of the National People’s Congress, Peng Qinghua, at the State House in Abuja.
He also confirmed NNPC was owed 2.8 trillion naira in outstanding subsidy payments by the government.
Kyari’s comments came afer long fuel queues returned to Nigerian cities as motorists rushed to fill their tanks while some retailers hiked prices amid uncertainty on the timing of the removal of the subsidy.
Tinubu said on Monday there was no provision for the subsidy in the budget, adding “so fuel subsidy is gone.” Many Nigerians took that to mean the subsidy would be immediately removed.
Vice President Kashim Shettima told reporters the subsidy was a “scam”, adding there would be “fierce opposition from those benefiting from the subsidy scam.”
The main labour union urged Tinubu to reconsider removing the subsidy.
Mele Kyari CEO NNPC Ltd
NNPC says it is spending 400 billion naira monthly on subsidising the petrol price.
In the main cities of Lagos and Abuja, motorists jammed outlets that sold at the regulated price of 185 to 195 naira a litre. But some were selling petrol for as much as 600 naira.
Kyari said although there was provision for the subsidy in the 2023 budget up to June 30, there was no money to fund it.
NNPC, in a statement by its Chief Corporate Communications Officer, Garba Deen Muhammad on Wednesday, said pump price at its retail stations have been adjusted.
The statement read, “NNPC Limited wishes to inform our esteemed customers that we have adjusted
our pump price of PMS across our retail outlets, in line with the current market
realities.
“As we strive to provide you the quality service we are known for, it is pertinent to
note that prices will continue to fluctuate to reflect market dynamics.
“We assure you that NNPC Ltd. is committed to ensuring ceaseless supply of products.
“The Company sincerely regrets any inconvenience this development might have caused.
“We greatly appreciate your continued patronage, support and understanding
through this time of change and growth”.
NNPC Limited is a for profit oil company in Nigeria. Formerly a government-owned corporation, it was transformed from a corporation to a limited liability company in July 2022. NNPC Limited is the only entity licensed to operate in the country’s petroleum industry. It partners with foreign oil companies to exploit Nigeria’s fossil fuel resources.
Akowe with reports from Abuja
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