NNPC Ltd. Denies Paying Fuel Subsidies, Clarifies Financial Practices
Chief Financial Officer Alhaji Umar Ajiya
In a recent statement, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has denied paying any fuel subsidies over the past nine months, according to Chief Financial Officer Alhaji Umar Ajiya.
Speaking in Abuja on Monday, Ajiya clarified that NNPC Ltd. has not disbursed any funds in the form of subsidies during this period. Instead, the company has been addressing shortfalls related to the importation of Premium Motor Spirit (PMS).
“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,” Ajiya stated. He emphasized that no marketer has received any subsidy payments from the company.
Ajiya explained that the company’s financial interactions are primarily related to the difference between the cost price of imported PMS and the subsidized sale price mandated by the government. “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,” he said.
He further detailed that this arrangement is a reconciliation process between the Federation and NNPC Ltd., with occasional financial adjustments made by the government to cover the shortfall. “There is no money exchanging hands with any marketer in the name of subsidy,” Ajiya clarified.
Dapi Segun, the Executive Vice President of downstream operations at NNPC Ltd., added that the company maintains an open credit agreement with PMS suppliers, which reflects its established credibility in the industry.
Segun addressed concerns about outstanding payments, noting, “Concerning the outstanding to the suppliers, it is not in that magnitude that has been put out, it is lower than the $6.8 billion.” He emphasized the importance of maintaining strong supplier relationships and ensuring consistent PMS availability across the country.
“It is a dynamic way, but the most important thing is to ensure that we continue to make PMS available across the country,” Segun concluded.
