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NNPC Ltd. Denies Paying Fuel Subsidy in Last Nine Months

The Nigerian National Petroleum Company Limited (NNPC Ltd.) has made a clarification regarding fuel subsidies, stating that it has not paid any subsidies to anyone in the last nine months. This was disclosed by the company’s Chief Financial Officer, Umar Ajiya, in Abuja on Monday.

According to Ajiya, the NNPC Ltd. has been importing Premium Motor Spirit (PMS), also known as petrol, which has been landing at a certain cost price. The government has been instructing the company to sell the PMS at half the price, resulting in a shortfall. The difference between the landing price and the selling price is what the company calls a shortfall.

The CFO emphasized that the company has not paid any marketer a dime as subsidy in the last eight to nine months. He also stated that no marketer has received any money from the NNPC Ltd. in the name of subsidy.

Ajiya explained that the company is only taking care of PMS importation shortfalls between the company and the federation. He added that the deal is between the federation and the NNPC Ltd. to reconcile, sometimes giving the company money, and there is no money exchanging hands with any marketer in the name of subsidy.

The company’s Executive Vice President, Downstream, Dapi Segun, also commented on the matter, stating that credit lines are prevalent in the downstream business based on the world wide commercial system. He added that the company was in an open credit agreement with PMS suppliers in the past, with term lines agreement for payment.

Segun said that the outstanding amount owed to suppliers is not in the magnitude that has been put out, and it is actually lower than the N6.8 billion. He emphasized the importance of maintaining a good relationship with suppliers to ensure timely payments.

The NNPC Ltd. has been under scrutiny for its fuel subsidy payments, with some reports suggesting that the company has paid billions of naira to marketers as subsidy. However, the company’s recent clarification suggests that this may not be the case.

In conclusion, the NNPC Ltd. has denied paying fuel subsidies to anyone in the last nine months, citing the company’s shortfalls in importing PMS and selling it at a lower price as instructed by the government. The company’s CFO and Executive Vice President, Downstream, have emphasized the importance of maintaining a good relationship with suppliers and ensuring timely payments.