The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced that it has not disbursed any fuel subsidies in the past nine months.
Umar Ajiya, the company’s Chief Financial Officer, provided this clarification on Monday in Abuja.
He explained that NNPC Ltd has solely been addressing the shortfalls in Premium Motor Spirit (PMS) importation costs between the company and the federal government.
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“In the last eight to nine months, the NNPC Ltd., has not paid anybody a dime as subsidy, no one has been paid kobo by the 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 certain cost price and government tells us to sell it at half price.
“So the difference between the landing price and that half price is what we call 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 Ajiya, credit lines are common in the downstream sector as part of the global commercial system. He noted that the company previously had open credit agreements with Premium Motor Spirit (PMS) suppliers, with established terms for payment.
Additionally, Dapi Segun, the Executive Vice President of Downstream at NNPC Ltd, stated that having open credit agreements with suppliers reflects the substantial credibility the national oil company has built over time.
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“Concerning the outstanding to the suppliers, it is not in that magnitude that has been put out, it is actually lower than the N6.8 billion.
“What matters really is the relationship between us and our suppliers to ensure that we keep faith in making these payments to our suppliers which we have done overtime.
“You would understand that it is not a static figure and I wouldn’t want to be quoting any figure, when we make payments it goes down, when they supply products it goes up.
“It is a dynamic way, but the most important thing is to ensure that we continue to make PMS available across the country,” he said.
