The Nigerian National Petroleum Company Limited (NNPC) has requested a refund of N4.71 trillion from the Federal Government to cover exchange rate differentials incurred while importing Premium Motor Spirit (PMS) between August 2023 and June 2024. This claim was disclosed by the Minister of Finance, Wale Edun, during the Federation Accounts Allocation Committee (FAAC) meeting in June.
The NNPC's demand highlights a significant financial burden due to the devaluation of the naira, which increased the cost of fuel imports. Despite the government's claim of ending fuel subsidies, the NNPC's request indicates that the government has been covering the difference between projected and actual import costs to ensure adequate fuel supply. The exchange rate used for these transactions surged from N650 to $1 in June 2023 to N1,200 by June 2024, creating a substantial financial gap.
State finance commissioners, including those from Akwa Ibom and Niger States, raised concerns about the growing debt and revenue shortfalls during the FAAC meeting. The NNPC justified its claim by pointing to the increased costs of importing fuel due to the fluctuating exchange rates. However, energy experts have questioned the rationale behind the NNPC's request, arguing that the company should be paying royalties and taxes to the government like other oil companies, rather than asking for refunds.
The situation underscores the ongoing complexities and challenges in Nigeria's fuel subsidy regime, despite official statements about its elimination. The NNPC's financial claims continue to spark debate and concern among government officials and industry experts.
