NNPC reveals the truth about the return of petrol subsidy

• The Nigerian National Petroleum Company Limited (NNPCL) has denied the return of petrol subsidy
• The company’s Group Chief Executive Officer, Mele Kyari, said that the company is recovering its fuel costs from the federal government
• There have been reports that the Nigerian government had caved in to popular demands and reverted the petrol subsidy it removed in May 2023

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

Contrary to speculations that President Bola Tinubu has asked the Nigerian National Petroleum Company Limited (NNPCL) to use its dividends to defray subsidy costs, the company has refuted claims on the return of subsidies.

In a statement on X, the Group Chief Executive Officer of NNPC Ltd, Mele Kyari, insisted that there are no subsidy payments but that the company is recovering its fuel costs from the federal government.

The Group Managing Director of NNPC, Mele Kyari, denies the return of the subsidy Credit: Bloomberg/Contributor.
Source: Getty Images

NNPC insists no subsidy

Reports had emerged that President Tinubu asked the national oil firm to use its dividends to pay for the petrol subsidy following NNPC's request that the government repay the FX differential used for petrol imports.

BusinessDay reported that the president approved using the company’s 2023 final dividends owed to the country as cover for petrol subsidies.

The report said that the president also approved halting the payment of 2024 interim dividends to the federation to boost NNPC’s cash flow.

NNPC projects new petrol payments for 2024

Additionally, NNPC reportedly informed the president that, due to subsidy payments, it could not pay taxes and royalties into the federation account, referring to the situation as a shortfall in subsidy and FX differential.

Reports say that a forecast from the NNPC shows that the total petrol subsidy expenses from August 2023 to December will amount to N6.884 trillion, leaving the oil company unable to remit N3.987 trillion in taxes and royalties to the federation account.

There have been speculations that the Nigerian government is offering an abridged subsidy following the rise in petrol's landing costs to N1,100 per litre.

Analysts believe that without some form of subsidy, the actual pump price of petrol would exceed N,500 per litre.

NNPC sets date to end petrol scarcity

Legit.ng previously reported that the Nigerian National Petroleum Company Limited has promised to end the current scarcity of Premium Motor Spirit, popularly called petrol, by Wednesday, August 21, 2024.

Olufemi Soneye, the Chief Corporate Communications Officer of NNPC, explained that the scarcity of the product is due to supply disruption, not the availability of the product.

Punch reports that Soneye promises that the scarcity will be cleared up as there are products available.

Source: Legit.ng