Despite Denial of Subsidy Payment, FG Admits NNPC Facing Bankruptcy

Oluwasegun SanusiSeptember 4, 20241 Mins read232

Bayo Onanuga, the Special Adviser on Information and Strategy to President Bola Tinubu, has said the Nigerian National Petroleum Company Limited (NNPCL) Limited admitted to having financial constraints because it can no longer subsidise petrol.

In an X post on Tuesday, he pointed out the NNPCL’s financial struggles and warned that if it continues to pay the difference between the landing cost and the pump price of petrol, the national oil company could face bankruptcy.

“NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent,” Onanuga stated.

He explained that the NNPCL’s debt situation has broader implications for the three tiers of government, which rely on the company’s payments into the Federation Account.

The NNPCL’s financial woes have hindered its ability to contribute to this account, raising concerns about the functioning of government operations.

He said the Dangote Refinery and other local refineries, including the government-owned Port Harcourt Refinery, are game-changers that could alleviate the crisis.

“When Dangote Refinery and other refineries, including government-owned Port Harcourt Refinery, come fully on stream, our country and economy will benefit on all fronts. Many good-paying jobs will be created along the value chain,” Onanuga noted.

It was earlier reported that the NNPCL increased the price of petrol to N855 per litre, claiming that the landing cost of Premium Motor Spirit (PMS) is around N1,200.

It will be recalled that the Tinubu’s administration has been criticised for its alleged covert continuation of subsidy on Premium Motor Spirit (PMS); even when the administration continues to deny the payment, the statement by NNPCL shows a stark disparity between the government’s claim and reality, in terms of payment of subsidy.

Read More: