NNPC has not been paying fuel subsidy to oil marketers — CFO
By Eyo Nsima
Contrary to speculation, the NNPC Ltd, a dynamic global energy company with businesses and operations across the entire spectrum of the energy value chain, yesterday, said it has not been paying fuel subsidy to oil marketing companies.
Speaking at the world press conference held at the NNPC Towers in Abuja, the Chief Financial Officer of the Company, Mr. Umar Ajiya said: “There is one fact I need to make very clear. In the last eight or nine years, this company has not paid anybody subsidy.
“No marketer has received money from us as subsidy. What has been happening is that we have been importing petrol, landing at a particular price and the government said we should sell it at a certain price.
“So, the difference between the landing price and cost is what we call shortfall or subsidy. The deal is between the federation and us to reconcile. Sometimes they give us money and sometimes we do net off. There is no money exchanging hands in the name of subsidy.”
Meanwhile, the company has declared a net profit of N3.297 trillion at the close of the financial year which ended in December 2023, indicating an increase of 28 per cent (over N700billion) when compared to the N2.548 trillion recorded in 2022.
The N3.297 trillion profit declared for 2023 is very symbolic as it is the highest ever to be recorded since the Company’s inception, 46 years ago.
He said: “Our fiscal performance reflects both strategic foresight and operational resilience. Despite inherent challenges of our operational and economic environment, we have improved the productivity and the financial performance of this great company.
Ajiya said that posting such impressive returns demonstrates NNPC Ltd’s commitment to sustaining profitability and supporting the attainment of national energy security as stipulated by the Petroleum Industry Act (PIA) 2021, and by extension, as expected by the Company’s shareholders.
Explaining that the NNPC Ltd will announce Initial Public offer (IPO) once the shareholders and Board make a decision, Ajiya also debunked claims on subsidy payment, saying the Company was only taking care of PMS importation shortfall between it and the Federation.
On his part, the Chairman of the NNPC Ltd Board, Chief Pius Akinyelure said that the excellent performance came as the fruit of the PIA 2021, the commitment of the Board, Management and staff of the company.
Akinyelure said that the shareholders of the company have since approved a final dividend of N2.1trn in line with PIA 2021 provisions.
Also speaking, the Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan said with improvements witnessed as a result of the renewed vigour in the war against crude oil theft and pipeline vandalism, NNPC Ltd is targeting 2million barrels per day crude oil production by the end of the year.
However, commenting on the current fuel queues in parts of Lagos and the FCT, the Executive Vice President, Downstream, Mr. Dapo Segun appealed for understanding from Nigerians, saying that the company is working with relevant stakeholders to address the distribution, evacuation and logistics challenges.
In 2021, NNPC declared profit in its operations for the first time. From a loss position of N803 billion in 2018; it reduced the loss further down to N1.7 billion in 2019.
In 2020, it posted its ‘first ever’ profit of N287 billion, then in 2021, it recorded a N674.1 billion profit and in 2022, the profit grew to N2.548, an unprecedented achievement in its financial performance.
