June 02, (THEWILL) – President Bola Ahmed Tinubu has directed that palliatives be put in place to cushion the effect of the removal of fuel subsidy on Nigerians.

The Group Chief Executive Officer (GCEO) of Nigeria National Petroleum Company Limited (NNPCL), Mele Kyari, disclosed this to newsmen after meeting behind closed doors with members of the National Working Committee (NWC) of the ruling All Progressives Congress (APC) at the party’s national secretariat in Abuja, on Thursday.

Kyari also confirmed ongoing rehabilitation of the nation’s four refineries, saying one of them will start operations this year.

His words: “There is a gradual process now of making a flexible and single effect regime. Everyone will be able to have access to foreign exchange and there is a transition going on now and NNPC cannot continue to be the sole importer. We know that this is going to vanish and the market will stabilise this.

“There is an ongoing process of rehabilitation and one of the refineries will come on stream this year. The second will come on stream next year and the third will come in 2025.

“The country is not able to settle NNPC for the money we are spending on the subsidy. Therefore, pricing this petroleum at the market is the right thing to do at this time. We believe that this will benefit the overall country in the long run and long term.

“I am aware that Mr President has directed some engagement and some palliatives will be put in place, and I am very sure this will happen,” Kyari said, adding that while there was provision for subsidy in 2022, not a single Naira was provided to finance it in 2023.

“And ultimately, while we held back our fiscal obligations, we still have a net balance of over N2.8 trillion that the federation should have given back to the NNPC.

“For any company, when you have negative N2.8 trillion, 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.

“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,” he stated.

On the benefits of subsidy removal, Kyari said when President Tinubu declared in his inaugural speech that subsidy was gone, the bond market appreciated within 24 hours.

“It is nothing else other than the statement around subsidy and balancing of the apex market. These two elements are major concerns that every investor all over the world, and every partner that we have is worried about. What is your apex regime and how do you deal with your subsidy?

“They know that this subsidy constitutes a huge amount of money and this country may not be able to survive and pay its debts. It is very clear that everybody understands this.

“Before today, the average subsidy level was N400 billion every month. That means every month you can do one major capital project from money that you do not have. This is really what it means. There is nothing anybody can do about it.

“There is this common argument that the masses will suffer. That we are going to have problems with them. I agree that once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it. It is very typical also, It goes up and down. The market determines what happens next,” he added.