THE Nigerian National Petroleum Company Limited (NNPCL) has clarified that it has not paid fuel subsidy to anybody in the last nine years, insisting that it was only taking care of Premium Motor Spirit (PMS) importation shortfalls between the company and the federation.
Chief Financial Officer (CFO) of the company, Alhaji Umar Ajiya, who made the clarifications on Monday, August 19, in Abuja, said: “In the last eight to nine years, the NNPC Limited has not paid anybody a dime as subsidy; no one has been paid kobo by the NNPC Limited 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 Limited to reconcile. Sometimes, they give us money, so there is no money exchanging hands with any marketer in the name of subsidy.”
Ajiya said 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.
The Executive Vice President, Downstream, Mr Dapo Segun, added that establishing an open-credit agreement with suppliers spoke volume of the credibility that the 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 N6.8billion.
“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.
