NNPCL demands refund of N4.7tn petrol import fund

The Nigerian National Petroleum Company Limited has demanded a refund of N4.71tn from the Federal Government to settle outstanding debts used to import Premium Motor Spirit, popularly called petrol, into the country.

The claim was listed as “Exchange rate differential on PMS and other joint venture taxes” on petrol products imported by the company between August 2023 to June 2024.

This was disclosed by the Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, at the June meeting of the Federation Accounts Allocation Committee. Our correspondent obtained the minutes of the meeting on Thursday.

Exchange rate differentials refer to the income accrued to banks or government agencies from the difference in value between two currencies at different times through foreign exchange’s sale and purchase prices.

For example, if you exchange one United States dollar for 0.9 euros today, and tomorrow you get $1 for 0.8 euros, the exchange rate differential is the change between these two rates.

This development also means that the government will support fuel imports by covering the difference between the projected rate and the actual expenses incurred by the NNPC for importing petroleum products into the country.

This difference in cost, which ordinarily should be reflected in the retail price of the product and borne by final consumers, contradicts the government’s claims that subsidies have been eliminated.

For example, if you exchange one United States dollar for 0.9 euros today, and tomorrow you get $1 for 0.8 euros, the exchange rate differential is the change between these two rates.

This development also means that the government will support fuel imports by covering the difference between the projected rate and the actual expenses incurred by the NNPC for importing petroleum products into the country.

This difference in cost, which ordinarily should be reflected in the retail price of the product and borne by final consumers, contradicts the government’s claims that subsidies have been eliminated.

Source The Punch