FG Pays NNPC To Sell Petrol At Half Price – CFO

The Nigerian National Petroleum Company Limited (NNPCL) has clarified that it does not pay subsidies directly to marketers.

Instead, NNPCL said the company was only handling petrol importation shortfalls between it and the federation.

The company’s Chief Financial Officer, Alhaji Umar Ajiya, made the clarifications on Monday in Abuja.

It said the government instructed NNPCL to sell petrol at a price below the landing cost, creating a shortfall.

“In the last eight to nine months, NNPCL has not paid anybody a dime as a subsidy; no one has been paid kobo by NNPCL 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 NNPCL to reconcile. Sometimes, they give us money, so there is no money exchanging hands with any marketer in the name of subsidy,” he said.

He stated that credit lines are prevalent in downstream businesses based on the worldwide commercial system.

He added that the company was in an open credit agreement with PMS suppliers in the past, with term-line contracts for payment.

Also, the Executive Vice President of downstream at NNPCL, Dapo Segun, said that establishing an open credit agreement with suppliers spoke volumes about the credibility the national oil company had 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 lower than the $6.8bn

“What really 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,” he said.

The Federal Government has repeatedly denied paying subsidies on petrol even when major marketers put the landing cost above N1,000 per litre.

Being the only importer of petrol, the Federal Government pays the NNPCL to sell fuel to Nigerians at a subsidised rate.

However, this has led to incessant fuel scarcity across the nation as experts seek an end to fuel importation.