Fuel Subsidy: Tinubu Rescued NNPCL, We Would Have Gone Bankrupt In June – Kyari.

The Group Managing Director of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari, has said the oil firm would have gone bankrupt due to the payment of fuel subsidy.

He made this known on Monday at the Energy and Labour Summit organised by the Petroleum and Natural Gas Senior Staff Association of Nigeria in Abuja.

He said the NNPCL was spending over N400bn on petrol subsidy monthly, stressing that the immediate removal of the scheme by Tinubu saved the oil firm from bankruptcy in June this year.

Kyari also revealed that about 25 licences that were meant for the construction of refineries in Nigeria had remained idle due to subsidies on refined petroleum products, particularly PMS.

He noted that previous governments had attempted to remove subsidies on petroleum products until May 29, 2023, when Tinubu announced the end of the scheme.

He said: “There were several attempts to do this in the past, spanning about 20 years, but it didn’t happen because there was a communication gap, by the wrong assumptions that when you take out subsidies, enormous pain will come. And that was a very difficult historical conversation.

“If there is one thing that stifles growth in the downstream sector of the petroleum industry, it is the existence of subsidies, and that is the reality. There are today close to 25 licences to create, build and operate refineries, (but) nobody will take the next step.

Because as long as you do not have certainty around pricing and who will pay for that difference, no one will put his money.”

Kyari said people would always cut corners as long as the market was not determining the price of petroleum products, adding that subsidy should have gone since February 2022 based on the provisions of the Petroleum Industry Bill.

The NNPCL boss stated that the National Assembly intervened and requested that the subsidy be sustained until June 30, 2023.