NNPC Denies Paying Fuel Subsidy

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has dismissed reports that it still pays subsidies for petrol.

The company's Chief Financial Officer, Umar Ajiya, made the clarifications in Abuja, on Monday, August 19, stating that it has not paid a dime as subsidy in the last 8 months.

Ajiya said NNPC Ltd. was only handling Premium Motor Spirit (PMS) importation shortfalls between the company and the federation.

 “In the last eight to nine months, NNPC Ltd. has not paid anybody a dime as a subsidy; no one has been paid Kobo by NNPC Ltd. in the name of subsidy. No marketer has received any money from us by way of subsidy. What has been happening is that we have been importing PMS, which has been landing at a specific cost price, and the government tells us to sell it at half price. So the difference between the landing price and that half price is a shortfall. And the deal is between the Federation and NNPC Ltd., to reconcile, sometimes they give us money, so there is no money exchanging hands with any marketer in the name of subsidy,” he said.

He stated that credit lines are prevalent in downstream businesses based on the worldwide commercial system. He added that the company was in an open credit agreement with PMS suppliers in the past, with term-line contracts for payment.

His clarification came after The Cable reported that President Bola Tinubu had approved the Nigerian National Petroleum Company (NNPC) Limited to use the 2023 final dividends owed to the federation to cover the cost of petrol subsidies.