The Nigerian National Petroleum Company (NNPC) Ltd. has confirmed that it is selling petrol (Premium Motor Spirit, PMS) at half its landing cost, but refutes claims that this constitutes a subsidy.
Speaking in Abuja, NNPC’s Chief Financial Officer, Umar Ajiya, clarified that the company is bearing the cost difference between the landing price, which is approximately N1,200 per liter, and the official pump price of about N600 per liter. This gap, amounting to N7.8 trillion from January to July 2024, is described as a “shortfall,” not a subsidy.
Ajiya stressed that no funds have been paid to marketers as subsidies in the last nine years. Instead, NNPC, as the sole importer of petrol, manages this financial shortfall internally in collaboration with the federal government.
“For nearly a decade, NNPC Ltd. has not paid any marketer a dime under the guise of a subsidy,” Ajiya stated. “The government instructs us to sell petrol at a price below the landing cost, and the difference is what we manage as a shortfall. This arrangement is strictly between NNPC Ltd. and the Federation.”
NNPC’s stance on avoiding the term “subsidy” comes amid political sensitivities, as the current administration has criticized previous governments for subsidy-related issues. Nonetheless, NNPC’s strategy in handling these costs is vital in maintaining the availability of petrol across Nigeria.
Be First to Comment