NNPC denies paying Fuel subsidy

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

On Monday, August 19, in Abuja, the company’s Chief Financial Officer, Umar Ajiya, provided the clarifications.

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

According to him, credit lines are common in downstream businesses because of the global commercial system. The company previously had open credit agreements with PMS suppliers that included 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.