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Subsidy: NNPCL justifies non-remittance of fund into Federal Account

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The Nigerian National Petroleum Company Limited, NNPCL, has revealed why it remitted literally zero funds to the Federation Account in 2022.

The Chief Financial Officer of the company, Umar Ajiya made the disclosure on Sunday.

In a 5.24 minutes video released on Sunday, the Chief Financial officer 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.

“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,” NNPCL said in the documentary.

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It stated that this enabled the oil firm to grow its profit from N674.1bn in 2021 to N2.54tn by the third quarter of 2022.

Ajiya further explained that the declaration of President Bola Tinubu that the subsidy was gone during his inaugural speech literally saved Nigeria N400bn on average every month.

“And what that meant was that the totality of the entitlements of tax, royalties and profits were all going into subsidy.

“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.

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“We were taking NNPC’s cash flows from other operations to augment for products and it could not be sustained beyond June 2023,” he added.

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