Subsidy removal: Nigerian government to offer palliatives – NNPC Boss

Mele Kyari, the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC Limited, has stated that he is aware of plans by Bola Tinubu, the Vice President of Nigeria, to provide palliative to citizens in order to reduce the amount of hardship that has been caused by the removal of the fuel subsidy.

This information was shared by Mr. Kyari while he was speaking to journalists immediately following a meeting with the National Working Committee of the All Progressives Congress, the party currently in power.

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The Group Managing Director of NNPC (GNPC GMD) stated that one of the Nigerian refineries will become operational this year, which will result in a reduction in the cost of importing fuel. He also stated that eventually, NNPC will no longer be the only importer of fuel in Nigeria.

“The creation of a flexible and single-effect regime is currently going through a gradual process. There is currently a transition taking place that will eventually make it possible for everyone to have access to foreign exchange. And NNPC cannot continue to be the sole importer. We are aware that this will go away, and the market will eventually establish a new equilibrium.

The process of rehabilitation is still going on, and one of the refineries is scheduled to start operating again this year. The second one will start operating the following year, and the third one won’t start until 2025.

“Of course, it should come as no surprise that we are no longer able to afford it. The bills for the subsidies have accumulated. The government of this country is unable to compensate NNPC for the amount of money that is being spent on subsidies. As a result, setting the prices of these petroleum products according to market conditions is the appropriate action to take at this time. Kyari stated that “we believed that this will benefit the country as a whole in the long run and in the long term”

He went on to say that the most recent administration did not allocate any funds for the purpose of subsidy.

There was a subsidy in the year 2022, but there was not one single naira provided in the year 2023 for the purpose of financing the subsidy.

“And ultimately, despite the fact that we avoided incurring additional fiscal obligations, we still have a net balance of more than N2.8 trillion that the federation ought to have returned to the NNPC.

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Kyari stated that it is impossible for a business to have receivables when the company’s net worth is negative N2.8 trillion because “there is no company in the whole of Africa that will lend to you, you cannot have receivables.”