The Nigerian National Petroleum Company Limited (NNPC Ltd.) has confirmed receiving payments from the Federal Government to cover the difference between the landing cost of petrol and its subsidized retail price. However, NNPC Ltd. emphasizes that it has not disbursed any fuel subsidies to marketers in the past nine months.
According to NNPC Ltd.’s Chief Financial Officer, Alhaji Umar Ajiya, the company has been handling the shortfall between the landing cost of imported Premium Motor Spirit (PMS) and its subsidized retail price. He clarified that this arrangement is solely between the Federation and NNPC Ltd., with no payments made to marketers under the guise of subsidies.
Ajiya explained that NNPC Ltd. maintains open credit lines with PMS suppliers as part of the standard commercial practice in the downstream sector. In the past, the company had term-line contracts for payment with suppliers.
Dapi Segun, Executive Vice President of Downstream at NNPC Ltd., stated that the company has a strong credit relationship with its suppliers, which has allowed it to maintain uninterrupted PMS supply across the country....Read Full Article [Click Here>]
Regarding the outstanding payments to suppliers, Segun indicated that the amount is not as high as reported, emphasizing the dynamic nature of the situation. He assured that NNPC Ltd. is committed to making regular payments to its suppliers.
This clarification comes amidst reports that President Bola Ahmed Tinubu approved the use of 2023 final dividends and the suspension of 2024 interim dividends to support NNPC Ltd.’s cash flow for subsidy payments. However, the government has denied the reintroduction of petrol subsidies.
Source: Vanguard
