The Nigerian National Petroleum Company Limited, NNPC Ltd, has denied paying fuel subsidy to anybody in the last nine months.
Chief Financial Officer of the company, Umar Ajiya, made the clarifications on Monday in Abuja.
Mr Ajiya said the NNPC Ltd was only taking care of Premium Motor Spirit (PMS) importation shortfalls between the company and the federation.
“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 him, credit lines are prevalent in the downstream business based on the world wide commercial system, adding that the company was in an open credit agreement with PMS suppliers in the past, with term lines agreement for payment.
Also, Dapi Segun the Executive Vice President, Downstream, NNPC Ltd., said that establishing an open credit agreement with suppliers spoke volume of the credibility which the national oil company had built over a period of time.
“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.
Meanwhile, this clarification is coming after TheCable in a report on Monday, stated that President Bola Tinubu gave NNPCL the approval to pay for subsidy after it complained that it had exhausted all strategies to ensure a stable supply of gasoline in the country.
The company’s desperate plea to Mr Tinubu according to the paper, underscored their grim realization: without intervention, they would be unable to continue remitting funds into the Federation Account.
President Bola Tinubu, however, directed that the taxes, royalties, and other funds earmarked for the Federation Account be diverted to cover the crushing costs of the fuel subsidy, a drastic measure that he approved on June 6, 2024.
A forecast from NNPCL, obtained by the newspaper, revealed the staggering reality: total petrol subsidy expenses from August 2023 to December 2024 are projected to soar to N6.884 trillion, leaving the oil company unable to remit a staggering N3.987 trillion in taxes and royalties to the Federation Account.
The precise amount of dividends that will be withheld or suspended remains shrouded in uncertainty.