The Nigerian National Petroleum Company Limited (NNPC Ltd.) has refuted media reports that it got presidential approval to pay subsidy on Premium Motor Spirit (PMS) popularly called petrol.
The company said it has not paid fuel subsidy to anybody in the last nine months.
Chief Financial Officer of the company, Alhaji Umar Ajiya, made the clarifications on Monday in Abuja.
According to Ajiya, NNPC Ltd. was only taking care of 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.
Ajiya further pointed out that credit lines are prevalent in the downstream business based on the worldwide commercial system, and that the company was in an open credit agreement with PMS suppliers in the past, with term lines agreement for payment.
Executive Vice President, Downstream, NNPC Ltd., Dapi Segun also said that establishing an open credit agreement with suppliers speaks volumes of the credibility 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 added.
