The Federal Government has pushed back against accusations of dishonesty regarding fuel subsidy payments, following NNPC Limited’s admission of owing suppliers $6 billion.
In a statement, President Bola Tinubu’s spokesperson, Bayo Onanuga, asserted that the government has been truthful about its policy to end fuel subsidies since May 29, 2023.
Onanuga emphasised that subsidy provisions have been absent from the budget, including the supplementary budget of 2023 and the 2024 budget.
He argued that the government’s commitment to deregulation and ending subsidies has been consistent, and that the NNPC’s financial struggles are a result of absorbing rising fuel costs to protect Nigerian consumers.
The spokesperson explained that NNPC Limited’s decision to absorb these costs was a “commendable disposition” to shield citizens from the impact of increasing crude oil prices and a devalued Naira.
However, he acknowledged that the company can no longer sustain this without becoming insolvent, highlighting the urgent need for a solution.
Onanuga Statement Reads
Tinubu government did not lie about fuel subsidies
I have read a series of articles attacking the Federal Government for not telling the truth about fuel subsidy payments, following NNPC Limited’s admittance it was owing suppliers some $6 billion.
Some of the stories have been written with relish, as the authors believed they have uncovered some scoops.
The truth is that there is no discovery. No lie uncovered. The government has been faithful to its policy that it was no longer going to pay fuel subsidies since President Tinubu announced the deregulation of the PMS sector on 29 May 2023. Since then, subsidy provisions have disappeared from the budget. It was not in the Supplementary budget of 2023, not in the 2024 budget and the amended 2024 budget.
So the giddy headlines about the so-called unraveling of the Tinubu government’s subsidy payment; and return of subsidy were not justifiable.
Rather what has unravelled was the commendable disposition of the oil company owned by all the tiers of government to absorb the rising costs of petrol at the pump and protect the Nigerian consumer. That generous disposition by NNPC Limited, backed by a compassionate president unwilling to let the people suffer, has been under threat for months, because of the rising cost of crude and the devalued Naira.
The NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent. The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government.
There are no easy choices. Something must be done to make NNPC survive, keep the engines of government running and petrol flowing at the pumps. That is the scenario that is unfolding and the game changer and big relief giver may well be the Dangote refinery and other local refineries which will become the fuel suppliers to the local market. 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. There will be many good paying jobs that will be created along the value-chain. There will also be a drop in the huge demand for foreign exchange to import petroleum products.
