The Nigerian National Petroleum Company (NNPC) Ltd has clarified its pricing strategy for petrol (Premium Motor Spirit, PMS), stating that it is currently selling at half the landing cost, but insists this does not constitute a subsidy.
During a press briefing in Abuja, NNPC’s Chief Financial Officer, Umar Ajiya, explained that while the pump price of petrol is around ₦600 per litre, the landing cost is closer to ₦1,200 per litre. Ajiya noted that NNPC has spent ₦7.8 trillion in the first seven months of 2024 to manage this “shortfall,” a term he prefers over “subsidy.”
Despite internal communications between NNPC and the presidency referring to the situation as a subsidy, Ajiya emphasized that NNPC is not engaged in subsidizing petrol. Instead, the company is handling the financial gap between the landing cost and the selling price in coordination with the Federation, without making payments to marketers under the guise of a subsidy.
Ajiya further clarified that no payments have been made to marketers over the past eight to nine months in the name of a subsidy. He reiterated that the difference between the landing price and the selling price is simply a shortfall that is managed internally, without any money changing hands in the name of a subsidy.
Naija News notes that Ajiya did not address how much of the $4.9 billion used to cover the shortfall could have contributed to the federation account if not for these expenses. It is believed that the All Progressives Congress (APC) government is avoiding the term “subsidy” due to its negative connotations, especially since the issue was a major talking point during its 2015 campaign against the Peoples Democratic Party (PDP).
News Editor 
Hyelsinta Hassan