The Nigerian National Petroleum Company Limited (NNPC Ltd.) has confirmed that it has not issued any fuel subsidies over the last nine months. Alhaji Umar Ajiya, the company’s Chief Financial Officer, made this announcement during a press briefing in Abuja on Monday.
Ajiya detailed that instead of providing subsidies, NNPC Ltd. has been managing the financial gap between the cost of importing Premium Motor Spirit (PMS) and the lower price mandated by the government. “In the last eight to nine months, NNPC Ltd. has not disbursed any funds as subsidies. No marketer has received money from us for subsidies,” he said.
He explained that the discrepancy between the import cost of PMS and its government-set sale price creates what is known as a shortfall. Ajiya noted that any financial adjustments for this shortfall are directly settled between NNPC Ltd. and the federal government, without involving payments to marketers.
“The arrangement is between the Federation and NNPC Ltd.,” Ajiya clarified. “The government sometimes provides funds to cover the shortfall, but no subsidy payments are made directly to marketers.”
Addressing concerns about outstanding payments to suppliers, Ajiya mentioned that while the figure often cited is $6.8 billion, the actual amount is lower. He stressed that the financial situation is dynamic, with amounts fluctuating based on payments and product deliveries. “It’s not a fixed figure. Payments reduce the amount owed, while new supplies increase it,” he explained.
Dapi Segun, Executive Vice President of Downstream at NNPC Ltd., emphasized the company’s established credibility through open credit agreements with PMS suppliers, showcasing NNPC Ltd.’s strong reputation in the industry.
“Our primary goal is to ensure the consistent availability of PMS nationwide,” Segun stated. “Maintaining this availability and fulfilling our obligations to suppliers are key priorities.”
The briefing also covered NNPC Ltd.’s 2023 financial performance, which reported a profit of N3.3 trillion.
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