The Chief Financial Officer of Nigerian National Petroleum Company (NNPC) Limited, Alhaji Umar Ajiya, has clarified that the arrangement between NNPC Ltd. and the federation is strictly for reconciliation purposes, with no actual money exchanged concerning the subsidy.
He emphasized that NNPC Ltd. has not paid any subsidy in the past eight to nine years and is only responsible for handling the shortfall in Premium Motor Spirit (PMS) importation costs between the Federation and the company.
According to Mr. Ajiya, the government directed NNPC Ltd. to sell PMS at a reduced price, leading to a shortfall between the landing cost and the selling price.
Mr. Ajiya said that NNPC Ltd. was responsible for handling only Premium Motor Spirit (PMS) importation shortfalls between the Federation and the Company.
He stated that they have been importing PMS at a specific cost price, the government also instructed that they sell for half the price, saying that there is now a shortfall between the landing price and the half price.
The Executive Vice President of Downstream at NNPC Ltd., Mr. Dapi Segun, also highlighted the company's credibility and the strong relationships it has built with suppliers, which have allowed for open credit agreements.
He stressed the importance of maintaining these relationships and ensuring timely payments to suppliers, while also ensuring the continuous availability of PMS across the country.
NNPC Ltd. also addressed reports regarding its inability to remit funds to the Federation Account, stating via their X (formerly Twitter) account that the company and its subsidiaries regularly remit taxes to the Federal Inland Revenue Service (FIRS) and contribute significantly to the tax revenue sharing at the Federation Account Allocation Committee (FAAC).
They reiterated that NNPC Ltd. is the largest contributor to this tax revenue and has not defaulted on its obligations.
In a press release on August 18th, 2024, (formerly Twitter) account the NNPC Ltd. Said: "It is not correct to say that NNPC Ltd. has not remitted any money to the Federation Account since January. NNPC Ltd. and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly. This is in addition to payments of CIT to road contractors under the Road Investment Tax Credit Scheme. In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC)".
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