The Nigerian National Petroleum Company Limited (NNPCL) has requested a refund of N2.6 trillion for foreign exchange differentials related to fuel imports from August 2023 to June 2024. This demand was revealed by Finance Minister Wale Edun in the minutes from the Federation Accounts Allocation Committee’s June meeting. Due to recent forex rate hikes, NNPCL’s claim has escalated to N4.71 trillion as of June 2024.
Edun noted that NNPCL had presidential approval to use a “Weighted Average Rate” for fuel imports from October 2023 to March 2024. Joshua Danjuma, General Manager of the FAAC office at NNPCL, clarified that the claim covers the landing costs of Premium Motor Spirit (PMS). The claim’s increase, attributed to forex rate changes, was confirmed by an NNPCL representative.
The minutes detailed an outstanding claim of N2.69 trillion as of May 2024 due to the use of the Weighted Average Rate. The National Economic Council had allowed fuel imports at N650 per dollar starting June 2023, but the naira’s devaluation raised the rate to N1,200, creating a differential of N550.
A month-by-month analysis showed the claim growing from N1.18 trillion in August 2023 to N4.71 trillion by June 2024. This development contrasts with Petroleum Minister Heineken Lokpobiri’s statement on the removal of the fuel subsidy and President Bola Ahmed Tinubu’s June 2023 announcement of subsidy removal.
Despite these declarations, international bodies like the IMF and World Bank have suggested that fuel subsidies might have been reintroduced. Former President Olusegun Obasanjo and recent industry reports confirm rising subsidy costs, with the Major Energies Marketers Association of Nigeria estimating monthly subsidies at N707 billion and the Independent Petroleum Marketers Association of Nigeria predicting similar figures.
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