The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari has distanced his organisation from allegations that he plans to frustrate the general elections through induced scarcity of Premium Motor Spirit.
He insists there is no going back on the removal of fuel subsidies.
Speaking during a consultative meeting with the Sen Abdullahi Adamu-led national working committee (NWC) of the ruling All Progressives Congress (APC), in Abuja, he maintained that the subsidy regime can no longer be sustained in the country.
The NNPPL chief argued that Nigeria, as well as the 36 state governments of the Federation, would no longer be creditworthy any moment from now under the prevailing subsidy regime.
He argued that contrary to the widely held notions, the rich rather than the poor remain the major beneficiary of the fuel subsidy regime.
Acknowledging that the removal of fuel subsidy would visit untold hardship on Nigerians, he expressed the hope that the attendant cost of living that would come with the measure would fizzle out in due course.
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 of liquidity. 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 can no longer pay.
“The only way you can stop this is to stop this conversation around subsidy 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.”
The Guardian
