By Abiola Olawale
The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that it has been retailing petroleum products at half of the landing cost.
Although the company insists it is not disbursing any funds for subsidies as at now, it is still selling petroleum products for half of the original cost.
This was made known by the Chief Financial Officer of the company, Alhaji Umar Ajiya.
Ajiya clarified that NNPCL has not disbursed any subsidies to any party in the last nine months.
He explained that NNPCL has been the sole entity managing the shortfall resulting from Premium Motor Spirit (PMS) imports between the company and the federation, without any actual subsidy payments being made.
He stated: “In the last eight to nine months, NNPC Ltd. has not paid anybody a dime as a subsidy; no one has been paid Kobo by 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 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.”
Also, Dapi Segun, the Executive Vice President of downstream at NNPC Ltd., said that establishing an open credit agreement with suppliers speaks volumes about the credibility the national oil company had built over time.
He said: “Concerning the outstanding to the suppliers, it is not in that magnitude that has been put out, it is lower than the $6.8 billion.
“What matters 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 over time.
“You would understand that it is not a static figure, and I wouldn’t want to quote any figure. When we make payments, it goes down, and 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.”
This is coming after reports emerged that President Bola Ahmed Tinubu has purportedly given NNPCL the nod to use its 2023 dividends due as remittance to the federation Account for payment for petrol subsidy.
The president was also said to have approved the suspension of the payment of 2024 interim dividends to the federation Account to augment the oil firm’s cash flow.
