UNBELIEVABLE! Hours After Return Of Fuel Subsidy, SEE What NNPC Announced That Shocked Everyone
The Nigerian National Petroleum Company Limited (NNPC Ltd. ) has clarified that it has not disbursed any fuel subsidies over the past nine years. This announcement was made by the company’ s Chief Financial Officer, Alhaji Umar Ajiya, on Monday in Abuja.
Ajiya explained that NNPC Ltd. has not paid out any subsidies during this period. Instead, the company has been dealing with shortfalls related to the importation of Premium Motor Spirit (PMS). The shortfall arises when the cost of importing PMS is higher than the selling price mandated by the government. According to Ajiya, while the government sets the selling price of PMS at half of its landing cost, NNPC Ltd. has not compensated marketers directly for this discrepancy. Rather, the company has been managing the financial gap between the importation costs and the selling price through a reconciliation process with the Federation.
Ajiya emphasized that there has been no direct exchange of subsidy payments with marketers. The arrangement is such that sometimes the government provides funds to help cover the shortfall, but these transactions do not involve direct payments to marketers as subsidies.
The CFO also highlighted that credit arrangements are a common practice in the downstream oil sector globally. Historically, NNPC Ltd. has engaged in open credit agreements with PMS suppliers, operating under term- line contracts for payments.
Dapi Segun, the Executive Vice President of Downstream at NNPC Ltd., added that the company’ s credibility is reflected in its open credit agreements with suppliers. He noted that the outstanding amounts owed to suppliers are less than the previously reported figure of $6. 8 billion. Segun underscored the importance of maintaining strong relationships with suppliers to ensure ongoing payments and the availability of PMS across the country.
He also explained that the figures related to outstanding payments are not static and fluctuate based on ongoing transactions. When payments are made, the outstanding amount decreases, and it increases with new supplies. The dynamic nature of these figures means that quoting a precise amount is challenging. The key focus, Segun emphasized, is to maintain a steady supply of PMS throughout Nigeria.
