Malam Mele Kyari, Group Managing Director and CEO of NNPC Limited and President Muhammadu Buhari at the Recent Unveiling of NPPC, in Abuja, FCT

Kyari says subsidy not NNPC’s burden, affirms Company expects N422bn remittances from 6 IOCs

*Nigeria’s national oil company announces the international oil companies’ remittances are for ‘May 2022 domestic crude oil payable in August 2022 by NNPC in line with the 90 days payment terms’

Isola Moses | ConsumerConnect

Figures obtained from the Nigerian National Petroleum Company (NNPC) Limited indicates the National Oil Company (NOC) expect six international oil companies to remit a total of N442.37billion August 2022, being proceeds from the sale of domestic crude oil May this year.

The NNPC also explained that the N422.37billion was for 8.887 million barrels of oil for May 2022 domestic crude payable August.

NNPC also noted that the six IOCs are joint venture partners of the national oil company.

The Company as well outlined the companies to include: Chevron Nigeria Limited, Mobil Producing Nigeria, and Nigerian Petroleum Development Company, the flagship upstream subsidiary of NNPC.

Others include: Total Exploration and Production Nigeria, First Exploration and Production, as well as Addax Petroleum.

Figures from the oil firm also indicated that Chevron will pay N162.24billion for 3.49 million barrels of crude oil, while N90.06billion for 1.9 million barrels of crude is expected from Mobil this month.

It was learnt NPDC and Total are to remit N41.13billion and N47.26billion for 948,296 and 948,776 barrels of crude oil respectively.

Similarly, the recently commercialised company stated that First E&P and Addax will pay N33.498billion and N48.188billion for 650,071 and 948,251 barrels of crude oil August 2022.

In regard to the funds to be remitted by the international firms, the national oil company stated that it was for “May 2022 domestic crude oil payable in August 2022 by NNPC in line with the 90 days payment terms.”

NNPC makes remittances from crude oil sale to the Federation Account, which are shared by the three tiers of government monthly.

However, it has not been able to make remittances since this year due to the humongous amount it spends on the subsidy of Premium Motor Spirit (PMS), otherwise known as petrol.

ConsumerConnect reports the NNPC is regarded as the sole importer of petrol into Nigeria for several years running, and has been shouldering the petrol subsidy burden on behalf of the Federal Government.

The development has reportedly stopped the country’s NOC from making remittances to the Federation Account.

Although the N422.37billion proceeds for May 2022 oil sale are expected in August 2022, the NNPC recently stated that it would no more make remittances to the monthly Federation Accounts Allocation Committee.

The company’s Group Chief Executive Officer, Mele Kyari, disclosed this, July 2022, at the official unveiling of the firm in Abuja as a commercial entity.

Kyari had also made it clear in July that subsidy on petrol was now the Federal Government’s burden and not the responsibility of the oil company, stressing that the company was now a private outfit and had nothing to do with FAAC anymore.

NNPC Limited and monthly FAAC contributions?

Malam Mele Kyari, Group Managing Director and Chief Executive Officer (GMD/CEO) of NNPC, in his response to a question on what would happen to NNPC’s monthly FAAC contributions, on the sidelines of NNPC unveiling in Abuja, FCT, recently.

Kyari said: “We are now a private company; would MTN go to FAAC?”

As regards any more FAAC remittances from the Company, going forward, the NNPC CEO stated “we will pay our taxes, royalties and deliver dividends to our shareholders.”

On the arrears to FAAC that were not delivered by the firm over the years, Kyari was quoted to have said, “Which arrears? That’s Nigerian National Petroleum Corporation.”

In regard to NNPC’s  handling of subsidy on petrol as a commercial entity now, the GMD/CEO said that fuel subsidy was “not a burden” on NNPC, The Punch report noted.

He said: “Subsidy is not NNPC’s burden.

“Subsidy is the decision of the state, and in every jurisdiction anywhere in the world, countries see them differently.”

Kyari added: “In some countries, they put petroleum tax on top of the market price of these products.”

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