The Nigerian National Petroleum Company (NNPC) Ltd says it is selling petrol, also known as premium motor spirit (PMS), at only half the land costing.
Umar Ajiya, the chief financial officer (CFO) of the NNPC, told NAN in Abuja on Monday that the national oil company is only bearing what he called the “shortfall” and not subsidy.
The official pump price of petrol is about N600/litre but the landing cost is around N1,200 — and Ajiya confirmed to Bloomberg that it cost the NNPC N7.8 trillion to make up for the “shortfall” in the first seven months of the year.
Subsidy is typically defined as selling a product below the cost price.
In official communication between NNPC and the president seen by TheCable, the word “subsidy” is used extensively to explain the “shortfall”.
