The Nigerian National Petroleum Company Limited (NNPC Ltd.) has clarified that it has not paid any fuel subsidies in the past nine months.
During a press briefing in Abuja on Monday, Alhaji Umar Ajiya, the Chief Financial Officer of NNPC Ltd., explained the company’s current financial practices and the nature of its fuel pricing.
According to Ajiya, NNPC Ltd. has not disbursed any funds for subsidies. Instead, the company has been dealing with shortfalls between the cost of imported Premium Motor Spirit (PMS) and the price set by the government.
Ajiya said, “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.”
He emphasized that the company has been importing PMS, and the government has instructed NNPC Ltd. to sell this fuel at a price that is significantly lower than the landing cost.
The discrepancy between the landing cost and the selling price, according to Ajiya, is what he referred to as a “shortfall.” This shortfall is addressed through an arrangement between NNPC Ltd. and the federal government, rather than through direct payments to fuel marketers.
“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 added.
This clarification comes amid ongoing debates and confusion about fuel pricing in Nigeria. NNPC Ltd. is the primary importer of fuel into Nigeria, and its pricing policies directly affect the cost of fuel at the pump.
Dapi Segun, the Executive Vice President of Downstream at NNPC Ltd., also addressed concerns regarding the company’s financial dealings with fuel suppliers.
Segun noted that NNPC Ltd. operates under an open credit agreement with these suppliers, a standard practice in the global commercial sector. This agreement allows NNPC Ltd. to manage its payments more flexibly.
Segun explained, “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 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.”
He also clarified that the amount owed to suppliers fluctuates. “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,” Segun said.
He emphasized that the priority is to ensure that PMS remains available across the country.
Despite these explanations, social media has been buzzing with skepticism and criticism. Many Nigerians have expressed confusion and frustration over the distinction between subsidies and the shortfall payments described by NNPC Ltd.
Donald (@ebukaaaaaaa) criticized the government, saying, “This shows that the Nigerian government under @officialABAT is dishonest and stealing from Nigerians. Imagine what it means if billions of dollars are being spent, and this government’s continued denial should be a thing of worry to well-meaning Nigerians.”
M.O.N (@ManOfNumbers_) suggested that the current situation is a disguise for ongoing subsidy payments. “At this point, APC has to die as a party for Nigeria to progress. You are not paying subsidy but you are selling at half the cost price and collecting the balance from FG. All of you, including Tinubu, are on drug.”
Alexnifemi01 (@alexnifemi01) questioned the high cost of fuel despite the government’s claims. “Nigerians, the truth is low-key these people are paying subsidy, but my question is why is fuel expensive? My take is simple: they are paying subsidy low-key and increasing the fuel price to have money to service our debts because fuel price is meant to come down.”
ỌFỌ BỤ NDỤ (@Oja_Igbo) responded with sarcasm, “We are not paying Subsidy, we cover the shortfalls with more money than when we were paying ‘Subsidy’. Una no dey steal but if una pass something go loss.”
Believer (@withGod1179) simply commented, “The new name is called ‘shortfall’ not subsidy.”
Brendan Chu (@Chuksoul) criticized the distinction made by NNPC Ltd., stating, “What kind of trash is this? You sell below cost price, government pays you for the shortfall, what does that mean? That you’re not paying to outside marketers doesn’t make it less of a subsidy.”
These reactions highlight a broader concern among Nigerians about the transparency and integrity of fuel pricing mechanisms. Many argue that the financial maneuvers described by NNPC Ltd. still effectively serve as a form of subsidy, just through different channels.
Social media users are calling for clearer explanations and more transparency from the government and NNPC Ltd. regarding fuel pricing. They argue that without a monthly update on the difference between the landing cost and selling price, trust in the government’s handling of fuel pricing remains shaky.
