How Fuel Subsidy Crisis Wiped Out NNPCL’s Revenue In 2022

The Nigerian National Petroleum Company Limited (NNPCL) has explained why it failed to remit any funds to the Federation Account in 2022. The company’s Chief Financial Officer, Umar Ajiya, revealed this in a video documentary released on Sunday.

He said that the fuel subsidy policy prevented the company from paying taxes and royalties to the government, as well as making any profit. He said that the fuel subsidy was a major obstacle to the company’s growth and development, until a new administration came into power and abolished the policy.

He said that the removal of the fuel subsidy by President Bola Tinubu in his inaugural speech in 2023 saved the country from losing N400bn every month. He said that the subsidy was consuming all the company’s earnings and leaving nothing for the Federation Account.

He said that the company was using its cash flows from other sources to subsidize the fuel products, but this was not sustainable beyond June 2023. He said that the company was in a dire situation in 2022, when it remitted zero funds to the Federation Account.

He said that the end of the fuel subsidy policy enabled the company to increase its profit from N674.1bn in 2021 to N2.54tn by the third quarter of 2022. He said that the company was now on a path of financial prosperity and stability.