AGS NEWS – The Nigerian National Petroleum Company Limited (NNPC) has requested a refund of N4.71 trillion from the Federal Government to cover debts related to importing petrol.

The claim, detailed as “Exchange rate differential on PMS and other joint venture taxes,” pertains to petrol imports from August 2023 to June 2024.

This was revealed by Finance Minister Wale Edun at a Federation Accounts Allocation Committee meeting in June. Exchange rate differentials are the discrepancies between currency values over time.

For instance, if the rate changes from 0.9 euros per dollar to 0.8 euros, the differential is the difference between these rates.

The refund request implies the government will need to support fuel imports by covering the cost difference, which conflicts with claims of eliminating fuel subsidies.

This comes as NNPC struggles to ensure adequate petrol supply nationwide.

The Finance Minister noted that NNPC received presidential approval to use a “Weighted Average Rate” for pricing from October 2023 to March 2024.

NNPC also sought an extension to cover the differential rate but was advised to petition the National Economic Council.

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The report shows a rising debt from N2.69 trillion in August 2023 to N4.71 trillion by June 2024 due to fluctuating exchange rates.

Following President Bola Tinubu’s declaration of ending fuel subsidies, the International Monetary Fund and World Bank have questioned the claim, suggesting subsidies were reintroduced.

Finance Commissioner Linus Nkan and other officials are seeking further clarification on the N2.6 trillion claim. NNPC representatives confirmed the amount reflects the increased landing costs of petrol.

Concerns have been raised about the adequacy of revenue generation and the accumulation of outstanding arrears. A forensic audit of the N2.7 trillion subsidy claim is underway.

Energy expert Wumi Iledare questioned why the government should reimburse NNPC when it sells oil in foreign currency, suggesting that NNPC should pay royalties like other oil companies.