NNPC Announces Petrol Pricing At Half Import Cost Without Subsidy Claims

NNPC Announces Petrol Pricing At Half Import Cost Without Subsidy Claims

The Nigerian National Petroleum Company (NNPC) Ltd has clarified that it is currently selling petrol (Premium Motor Spirit, PMS) at half of its landing cost, rather than providing a subsidy. During a briefing in Abuja on Monday, NNPC’s Chief Financial Officer, Umar Ajiya, explained that the company is addressing a “shortfall” rather than engaging in a traditional subsidy…… CONTINUE READING 

Ajiya noted that while the official pump price of petrol is about ₦600 per litre, the actual landing cost is approximately ₦1,200 per litre. He confirmed that NNPC has spent ₦7.8 trillion in the first seven months of 2024 to cover this shortfall.

Although internal communications between NNPC and the presidency—seen by TheCable—refer to this shortfall as a subsidy, Ajiya emphasized that this does not constitute a traditional subsidy. He stated that NNPC is simply managing the discrepancy between the landing cost and the selling price in coordination with the Federation.

Ajiya also clarified that no payments have been made to marketers under the guise of a subsidy in the past eight to nine months. He explained, “In the last eight to nine months, NNPC Ltd. has not paid anybody a dime as a subsidy; no one has been paid kobo by NNPC Ltd. in the name of subsidy.”

He added that while the government instructs NNPC to sell petrol at half its landing cost, the difference, referred to as a shortfall, is reconciled between NNPC and the Federation, without any payments to marketers.

Ajiya did not address how much of the $4.9 billion covering the shortfall might have contributed to the federation account if not for these adjustments. Speculation suggests that the APC government avoids the term “subsidy” due to its negative connotations, particularly since “subsidy scams” were a significant issue in the 2015 campaign against the PDP.

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