The Nigerian National Petroleum Company Limited (NNPC Ltd.), says it has not paid fuel subsidy to anybody in the last nine years.
Chief Financial Officer of the company, Alhaji Umar Ajiya made the clarifications on Monday in Abuja.
Ajiya said the NNPC Ltd. was only taking care of Premium Motor Spirit (PMS) importation shortfalls between the company and the federation.
NNPC Ltd debunks news of alleged inflated subsidy claims
“In the last eight to nine years 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.
According to him, credit lines are prevalent in the downstream business based on the world wide commercial system, adding that the company was in an open credit agreement with PMS suppliers in the past, with term lines agreement for payment.
Also, Dapo Segun the Executive Vice President, Downstream, NNPC Ltd., said that establishing an open credit agreement with suppliers spoke volume of the credibility which 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 said.
