Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has announced that there would be no going back on the elimination of fuel subsidy.
During a consultative meeting with the national working committee (NWC) of the ruling All Progressives Congress (APC), which is led by Sen. Abdullahi Adamu, in Abuja, he stated that the subsidy system in the nation can no longer be perpetuated.
The NNPPL boss stated that, under the current subsidy system, Nigeria’s government and the governments of the 36 member states of the Federation would cease to be creditworthy at any time.
Contrary to what is commonly believed, he claimed, the fuel subsidy scheme continues to primarily benefit the wealthy rather than the poor.
He expressed the hope that the additional expense of living that would result from the policy would fizzle out soon, acknowledging that the elimination of the fuel subsidy would cause Nigerians immense suffering.
According to him: “There was 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 2.8 trillion naira that the federation should have given back to the NNPC.
“For any company, when you have negative 2.8 trillion naira, 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. It means it is only on paper. So, it doesn’t exist.
“The conversation today is not really about when you taking off subsidy you can do roads, build hospitals, education etcetera. It is very true. Because you don’t have it now. You cannot give what you don’t have.
“This is exactly where we are today. So we no longer can bear it because into iquidity. If we continue we will run into defaults and the defaults of NNPC is the default 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 cannot longer pay.
“The only way you can stop this, is to stop this conversation around subsidy is when Mr President announced that subsidy is gone. In 24 hours the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market.”
