The federal government is owing Nigerian National Petroleum Company Limited (NNPCL) to the tune of N2.8 trillion in fuel subsidy payment deficit.

The Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, disclosed this Tuesday while speaking to journalists at the Presidential Villa, Abuja, after meeting with President Bola Tinubu.

Kyari, who was joined at briefing by the Authority Chief Executive Officer of the Nigerian Mainstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, said the disclosure by the president in his inauguration speech about the end to the subsidy regime was most welcomed as it is no longer sustainable.

He said the heavy subsidy burden had made it impossible for the NNPCL to have funds to channel into its core businesses.

Kyari said the petrol queues that started resurfacing across the country since Monday were understandable as marketers would like to understand the meaning of the president’s pronouncement that “subsidy is gone.”

The NNPCL GCEO said the uncertainty on the remark also caused consumers to rush for the product, a situation which has resulted in the queues seen at fuel stations.

He said government would initiate measures to cushion the effects of the removal of subsidy.

He said “since the provision of the N6 trillion in 2022, and N3.7 trillion in 2023, we have not have not received any payment whatsoever from the Federation.

“That means they (Federal Government) are unable to pay and we’ve continued to support this subsidy from the cash flow of the NNPC. That is, when we net off our fiscal obligations of taxes and royalty, there’s still a balance that we’re funding from our cash flow and that has become very difficult and affecting our other operations.

“We’re not able to keep some of these cash for invest on our core businesses and the end result is that it can be a huge challenge for the company and we have highlighted this severally to government that they must compensate and NNPC they must pay back the NNPC for the money that we have spent on the subsidy.

“So, today the country doesn’t have the money to pay for subsidy. There’s incremental value that will come from it. But it is not an issue of whether you can do it or not because today we can’t afford it and they are not able to pay our bill. That comes to how much is the federation owing NNPC now.

“Today, we are waiting for them to settle up to N2.8 trillion of NNPC’s cashflow from the subsidy regime and we can’t continue to build this,” he explained.