The Nigerian National Petroleum Company Limited (NNPCL) has demanded a refund of N2.6 trillion from the Federal Government to cover foreign exchange differential claims for fuel importation between August 2023 and June 2024.
This demand was disclosed by the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, during the June meeting of the Federation Accounts Allocation Committee (FAAC).
Edun explained that the NNPCL received presidential approval to import fuel using a "Weighted Average Rate" from October 2023 to March 2024.
However, due to the recent hike in the exchange rate, which stood at N1593.62 per dollar as of Thursday, the claim had increased significantly to N4.71 trillion by June 2024.
The General Manager of the FAAC office at the NNPCL, Joshua Danjuma, clarified that the amount claimed by the company was to cover the landing cost of Premium Motor Spirit (PMS).
He stated, "Reacting to the issue of the N2.6tn claim of NNPC Ltd against the Federation, the representative of NNPC Limited confirmed that the figure had increased hugely as of May 2024 due to the change in the rate at which the company was sourcing for the Forex to pay for the landing cost of PMS."
A month-by-month breakdown of the N4.7 trillion claim indicated that the debt with an outstanding balance of N1.18 trillion increased to N1.24 trillion in August 2023, N1.3 trillion in September 2023, and N1.51 trillion in October 2023.
By November, these claims increased by N570 billion to N2.08 trillion and by another N550 billion to N2.63 trillion in December 2023. The figure further increased to N3.19 trillion in January 2024, N3.29 trillion in February, N3.55 trillion in March, N4.02 trillion in April, N4.29 trillion in May, and N4.71 trillion as of June 2024.
This development contradicts the claim by the Minister of Petroleum Resources (Oil), Heineken Lokpobiri, that the fuel subsidy remained removed. In June 2023, President Bola Ahmed Tinubu announced the removal of the fuel subsidy.
However, former President Olusegun Obasanjo recently told the Financial Times that the fuel subsidy had returned due to inflation.
The Major Energies Marketers Association of Nigeria stated in July 2024 that with a landing cost of N1,117 per liter for PMS, the monthly subsidy on the commodity had risen to approximately N707 billion.
Similarly, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said Nigeria’s fuel subsidy expenditure might cross N700 billion monthly. This situation has led to lingering fuel queues in major cities across Nigeria, with the product currently sold between N617 to N800 per liter.
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