Group Managing Director of NNPC, Mele Kyari, said the monthly subsidy of over N400 billion for Premium Motor Spirit (PMS), commonly known as petrol, is severely straining the cash flow of the Nigerian National Petroleum Company Limited (NNPCL). Speaking at the final cut‑over to NNPC Ltd, Kyari explained that the company subsidises about N202 per litre of petrol, with more than 66 million litres pumped daily into the market. Although NNPCL will continue to supply PMS to meet national needs, the subsidy represents a painful drain on its finances.
NNPCL remains the sole importer of petrol in Nigeria, a role it has maintained for years while bearing the heavy cost of the fuel subsidy. Private oil marketers have withdrawn from the market because they cannot secure the dollars needed for PMS imports. Kyari noted that, under the Appropriation Act, a subsidy is mandated on petroleum product supplies, particularly PMS imports. “Three days ago the landing cost was around N315 per litre, but we sell it to customers at N113 per litre, creating a difference of roughly N202 per litre,” he said. Multiplying this subsidy by the daily volume of 66.5 million litres and by 30 days results in a monthly subsidy exceeding N400 billion.
He added that the subsidy has been funded continuously by NNPCL without any refunds from the Federal Ministry of Finance, despite being budgeted for in the Appropriation Act. “There is a budget provision for it, and our country has decided to maintain it. We are happy to deliver, but it drains our cash flow,” Kyari emphasized. He warned that sustaining the subsidy without reimbursements would be extremely challenging for the company’s finances, although NNPCL is working with the finance ministry and remains committed to supporting the nation’s energy security.
Fuel subsidies have become a contentious issue in Nigeria, with many experts and international bodies urging their removal. However, major labour unions oppose outright elimination, arguing that the federal government must first make the refineries operational.
At the same event, Kyari disclosed that the assets of the national oil company now total $60 billion, making it the largest firm in Africa. He highlighted the company’s financial turnaround: after posting a loss of N803 billion in 2018, NNPCL reduced the loss to N2.3 billion in 2019, recorded a profit of N287 billion in 2020, and achieved a profit of N674 billion in 2021. “We expect better performance in 2022; a company with $60 billion in assets cannot sustain a N673 billion loss,” he said, noting that firms with smaller asset bases have generated profits close to $9 billion.
Finally, Kyari announced that Nigeria’s crude oil and condensate production has risen to 1.6 million barrels per day, according to the latest data released on Thursday. He pledged that NNPCL and its partners will continue working hard to reach the 1.8 million‑barrel‑per‑day production quota approved for Nigeria by OPEC.
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