Contrary to media speculations, the fuel subsidy regime in Nigeria has ended and this is authoritative. For many years, fuel subsidy which was first introduced in response to the oil price shock of 1973 has been a subject for media debate but not anymore.
In a recent media session in Abuja, the FCT, the Group Managing Director of the Nigeria National Petroleum Corporation, NNPC, Mr. Mele Kyari, confirmed that subsidy has ended in the country and that there is no provision for it in the 2020 and 2021 budgets.
He said that among others reasons, subsidy has to be removed because it does not benefit the ordinary citizens and it is too elitist.
The GMD gave his Corporation a pass mark for its milestone achievement as the first company to publish its monthly financial and operations report.
“We published the 2018 audited financial statement in which we recorded a loss of over 800 billion naira and followed up with the 2019 in which we reversed the deficit.
The learning outcomes of the 2018 financial statement helped us to better understand the dynamics of the industry as we improved our processes and became more efficient.
And the result? We reversed our deficit and became the first Corporation to cut its losses in one financial year by over 800 billion Naira.
“In terms of operations, we have also automated our system to bring our services closer to the citizens.”
Mr. Kyari, however admitted that the global COVID-19 pandemic adversely impacted the operations of the Corporation.
“2020 has been a very difficult year for us because we shut down some facilities, cut down some productions and we also had issues with our shareholders and stakeholders who are of the opinion that we are not meeting their expectations.”
But we believed that accountability and transparency are key are key to turning the NNPC into an efficient and profit-oriented enterprise and we shall not relent in our efforts to meet our objectives to our stakeholders and shareholders.
Mr. Kyari also spoke on the operational target of the NNPC in terms of its production benchmark needed to meet domestic needs:
’We admit that our target was to reach 3 million barrels per day but our current production levels is between 1.6 and 1.7 barrels per day while the highest has been 2.4 million barrels.
“But we are confident that the target is within our reach except for the challenge of COVID-19 which resulted in the net loss of over 1 trillion dollars for the oil and gas industry.
Despite the challenges of COVID-19, I can confidently report that we fulfilled our obligations to the federation account for seven months without fail this year,” he said.
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