[TOP STORIES]: NNPC Ltd. Denies Ongoing Petrol Subsidy Payments

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The Nigerian National Petroleum Company Limited (NNPC Ltd.) has dismissed reports suggesting that it continues to pay subsidies on petrol. The clarification was made by the company's Chief Financial Officer, Umar Ajiya, in Abuja on Monday, August 19, 2024.

Ajiya stated that NNPC Ltd. has not made any subsidy payments in the past eight to nine months, emphasizing that no marketer has received any money from the company in the name of a subsidy. Instead, he explained, NNPC Ltd. has been handling the shortfalls in Premium Motor Spirit (PMS) importation 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 a kobo by NNPC Ltd. in the name 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," Ajiya explained.

He also noted that credit lines are common in downstream businesses, aligning with global commercial practices. In the past, NNPC Ltd. had open credit agreements with PMS suppliers under term-line contracts for payment.

Ajiya's comments follow a report by The Cable claiming that President Bola Tinubu had authorized NNPC Ltd. to use the 2023 final dividends owed to the federation to cover the cost of petrol subsidies.