The Special Adviser to the President on Information and strategy, Bayo Onanuga, stated that the $6 billion owed to oil traders by the Nigerian National Petroleum Corporation (NNPC) Limited serves as clear proof that President Tinubu was truthful about the removal of the fuel subsidy......See Full Story>>.....See Full Story>>
The Genius Media Nigeria reports that Onanuga made this remark in an X (formerly Twitter) post on Tuesday.
The presidential spokesperson stated that the debt arose because the budget did not account for the fuel subsidy, leaving the NNPC to bear the burden of the price difference caused by the devaluation of the naira and the high cost of crude oil.
“I have read a series of articles attacking the Federal Government for not telling the truth about fuel subsidy payments, following NNPC Limited’s admittance it was owing suppliers some $6 billion.
“Some of the stories have been written with relish, as the authors believed they have uncovered some scoops.
“The truth is that there is no discovery. No lie uncovered. The government has been faithful to its policy that it was no longer going to pay fuel subsidies since President Tinubu announced the deregulation of the PMS sector on 29 May 2023. Since then, subsidy provisions have disappeared from the budget. It was not in the Supplementary budget of 2023, not in the 2024 budget and the amended 2024 budget.
“The NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent. The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government,” Onanuga said.
Backstory
Nairametrics previously reported that NNPC Limited has acknowledged its debt to international oil traders, which has significantly contributed to the shortage of fuel supply to local marketers.
Recent reports indicate that NNPC owes these traders approximately $6 billion in subsidy obligations, leading the traders to halt the supply of imported petrol to the national oil company.
Although NNPC initially denied these claims, the company later admitted that its outstanding debts to suppliers have been a major factor behind the ongoing fuel scarcity across the country.
“NNPC Ltd. has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd. remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” NNPC said.
Although NNPC has yet to confirm the reintroduction of the subsidy, its recent statement suggests that the federal government may need to step in to help settle some of the company’s obligations to international oil traders.