The Nigerian National Petroleum Company Limited (NNPC Ltd.) has confirmed that it has not disbursed any funds for fuel subsidies over the past nine months. This was clarified by the company’s Chief Financial Officer, Alhaji Umar Ajiya, during a briefing on Monday in Abuja.

Ajiya explained that NNPC Ltd.’s financial engagements have been focused solely on addressing the shortfall in Premium Motor Spirit (PMS) importation costs, which is a matter between the company and the federation.

“In the last eight to nine months, NNPC Ltd. has not paid a single kobo to anyone as a fuel subsidy,” Ajiya stated. “No marketer has received any subsidy payments from us. The situation we are dealing with involves importing PMS, which arrives at a certain cost. The government then directs us to sell it at a reduced price, creating a shortfall. This shortfall is a matter of reconciliation between the Federation and NNPC Ltd., and occasionally, the government provides funds to cover it. However, no money is exchanged with marketers under the guise of subsidy payments.”

Ajiya further elaborated that the downstream petroleum sector operates on global commercial principles, with credit lines being a common practice. NNPC Ltd. has maintained open credit agreements with PMS suppliers, adhering to term line agreements for payments.

Adding to the discussion, Dapi Segun, Executive Vice President of Downstream Operations at NNPC Ltd., highlighted the company’s strong track record and credibility, which has facilitated the establishment of these open credit agreements with suppliers.

“Regarding the outstanding payments to suppliers, the actual amount is significantly lower than the reported N6.8 billion,” Segun noted. “The key point is the robust relationship between NNPC Ltd. and its suppliers, which ensures that we consistently honor our payment obligations. The outstanding amount is not a static figure; it fluctuates as payments are made and products are supplied. The critical goal is to ensure the continuous availability of PMS across the country.”