By Ayomide Otitoju
The Nigerian National Petroleum Company Limited (NNPCL) has requested an additional ₦1.19 trillion subsidy refund for July 2024, citing exchange rate differentials and joint venture taxes related to Premium Motor Spirit (PMS) imports. This follows an earlier claim that exchange rate differentials stood at ₦5.31 trillion by July 2024, up from ₦4.56 trillion in June 2024.
The Federation Account Allocation Committee (FAAC) Sub-Committee raised concerns over NNPCL’s accounting practices, specifically questioning discrepancies in their reporting. The NNPCL included ₦1.19 trillion as a balance carried forward, but this amount had not been previously acknowledged in earlier FAAC reports.
In response, the Sub-Committee recommended that NNPCL resubmit the figure for further consideration, citing a lack of supporting documentation, including detailed information on PMS volumes, pricing, and sales. This information was deemed necessary for properly assessing the validity of the claims.
The issues with NNPCL’s subsidy-related claims reflect ongoing challenges with government spending on fuel imports. Despite President Bola Tinubu’s declaration to eliminate fuel subsidies in 2023, the government has quietly continued to cover costs through the NNPCL, raising questions about the true status of subsidy reforms.
The demand for an additional ₦5.31 trillion is a significant burden on the Federation Account and highlights concerns over the sustainability of the current subsidy framework, especially as the government continues to struggle with managing fuel costs and economic reforms.
