The Nigerian National Petroleum Company (NNPC) Limited has disclosed that it remitted zero allocation to the country’s coffers in 2022 due to the payment of subsidy on Premium Motor Spirit, popularly called petrol.
This is even as the oil company stated that the emergence of a new administration brought an end to the subsidy regime and saved the company from bankruptcy and set it on a path of financial prosperity.
The Chief Financial Officer (CFO), NNPCL, Umar Ajiya made this known in a five minutes plus video released by the oil major on Sunday, January 28, 2024.
Ajiya added that the said fuel subsidy stopped the revenue generating firm from remitting taxes and royalties to the Federation Account, as well as halted the company from making profit.
This is significant because the NNPCL is a major revenue generating agency in Nigeria, operating as the national oil company in charge of the management, sales, etc, of the country’s crude oil and gas, among other key functions while the country depends majorly on the sales of crude for revenue generation and foreign exchange earnings.
“The lingering constraint of fuel subsidy payment hampered its (NNPCL) growth potential, until a new administration emerged, bringing an end to the subsidy regime and saving the company from bankruptcy and setting it on a path of financial prosperity”.
“And that was why we reached a position in 2022 where we literally remitted zero to the Federation Account. It was unpalatable, but we can’t give what we don’t have. “We were taking NNPC’s cash flows from other operations to augment for products and it could not be sustained.
Continuing, Ajia stated that the removal of subsidy had made the company start making remittances into the Federation Account and has also enabled the oil firm to grow its profit from N674.1bn in 2021 to N2.54tn by the third quarter of 2022.
“We have now begun to pay dividends to the federation. We are also paying our due obligations in terms of taxes and royalties,” he stated.
The company further stated in the documentary that the end to subsidy enabled it to contribute N4.5tn to the Federation Account in nine months.
“For the first time in a long time, NNPC Ltd in 2023 contributed to the Federation Account, accounting for N4.5tn between January and September 2023,” the national oil company stated.
