The Nigerian National Petroleum Company Limited (NNPC Ltd.) has clarified that it has not paid any fuel subsidy in the last nine months. This statement was made by the company’s Chief Financial Officer, Alhaji Umar Ajiya, during a press briefing on Monday in Abuja.
Ajiya explained that while NNPC Ltd. has been managing the shortfall in Premium Motor Spirit (PMS) importation costs, no funds have been disbursed as subsidies. “In the last eight to nine months, NNPC Ltd. has not paid a single kobo to anyone under the guise of subsidy,” Ajiya stated. “No marketer has received any money from us in the name of subsidy.”
He further elaborated that the company has been importing PMS at a specific cost, but the government mandates that it be sold at a lower price. The difference between the landing cost and the selling price is what the company refers to as a “shortfall.” This shortfall is settled between the Federation and NNPC Ltd., without any direct payments to marketers.
Ajiya also highlighted that credit lines are common in the downstream petroleum sector, operating within the global commercial system. In the past, NNPC Ltd. had established open credit agreements with PMS suppliers, allowing for payment under term lines agreements.
Additionally, Dapi Segun, the Executive Vice President of Downstream at NNPC Ltd., emphasized that the company’s ability to establish and maintain open credit agreements with suppliers is a testament to the credibility NNPC Ltd. has built over time.
“Regarding the outstanding payments to suppliers, the figure is not as high as the N6.8 billion that has been speculated,” Segun said. “The relationship with our suppliers is crucial, and we are committed to honoring our payment obligations. The outstanding amount is dynamic, fluctuating as payments are made and new supplies are received. Our primary focus is ensuring the continuous availability of PMS across the country.”
