The Nigerian National Petroleum Company Limited(NNPCL) has demanded the refund of N2.6 trillion foreign exchange differential claim for fuel importation between August 2023 to June 2024.
Minister of Finance and the Coordinating Minister of the Economy, Wale Edun disclosed this in the recently released minutes of the June meeting of the Federation Accounts Allocation Committee.
Taking the recent hike in FX which stood at N1593.62 per dollar as of Thursday, 8 August, 2024 into consideration, a document from NNPCL showed that the claim had increased to N4.71 trillion as of June 2024.
Edun explained to state commissioners of finances that NNPCL got presidential approval to import fuel using a “Weighted Average Rate” from October 2023 to March 2024.
A further clarification was provided to the commissioners by the General Manager of the FAAC office at the NNPCL, Joshua Danjuma.
He said that the amount claimed by the company was to cover the landing cost of PMS.
“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 significantly 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”, he said.
The minutes read, “NNPC Limited Exchange Rate Differentials on PMS Importation and Other Joint Venture Taxes for the period August 2023 to April 2024.
“The chairman, PMSC (Post Mortem Sub-Committee) reported that NNPC Limited informed the sub-committee that it had an outstanding claim of N2,689,898,039,105.53 against the federation as a result of the use of ‘Weighted Average Rate’ as of May 2024.
“Furthermore, he disclosed that the sub-committee was able to establish that there was Presidential approval to use the ‘Weighted Average Rate’ from October 2023 to March 2024.”
It was gathered that the National Economic Council had granted the NNPC permission to import fuel at an exchange rate of N650 to $1 at retail coastal pump prices from June 2023 but the devaluation of the naira surged the price to N1,200, leading to an exchange rate differentials of N550.
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 N550bn to N2.63 trillion in December 2023.
This further indicated that the figure increased to N3.19 trillion in January 2024, N3.29 trillion in February, N3.55 trillion in March, N4.02tn in April and N4.29 trillion in May and N4.71 trillion as of June 2024.
The development contradicts Minister of Petroleum Resources(Oil), Heineken Lokpobiri’s claim that fuel subsidy remained removed.
Recall that in June 2023 President Bola Ahmed tinubu announced fuel subsidy removal.
In a recent interview, the Minister of Finance said that fuel subsidy payment is not in the 2024 budget.
However, the International Monetary Fund and World Bank had hinted that the Nigerian government had reintroduced fuel subsidies.
Recently, former President Olusegun Obasanjo told the Financial Times in an interview that fuel subsidy has returned in Nigeria due to inflation.
Major Energies Marketers Association of Nigeria in July, 2024 had stated that with a landing cost of N1,117 per liter for PMS, 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.
The development comes as fuel queues linger in major cities in Nigeria.
The product is currently sold between N617 to N800 per liter across locations in Nigeria.
Source: Daily Post
