NNPC sales are being squeezed due to subsidy payments, according to FAAC.

The Nigerian National Petroleum Corporation (NNPC) has been forced to deny that it is cash-strapped.

According to the Cable newspaper, NNPC will not pay any money to the Federation Accounts Allocation Committee (FAAC) in May.

According to the paper, NNPC will deduct 111.96 billion naira ($294.3
million) from its April earnings, citing a letter from the firm to
Nigeria’s Accountant General. This deduction was necessary to cover the
cost of supplying petroleum products to Nigeria, according to the study.

This is the difference between the price at which NNPC buys and sells goods.

The NNPC said in a statement that the deficit was just in the sum it needed to pay the FAAC. It stated that this does not ‘represent the corporation’s overall financial results.’

The NNPC stated that it intends to address the shortfall. The corporation is doing everything possible to ensure revenue and help the government.

It said that the state-owned business is on a ‘positive financial trajectory.’ It reaffirmed its commitment to fulfill its financial obligations.

NNPC CEO Mele Kyari said in March that the company was facing a 129.6 billion naira ($340 million) shortfall.

According
to a letter obtained by The Cable, NNPC imported petrol at a cost of
184 naira ($0.48) per litre and sold it for 128 naira ($0.34) per litre.

In an interview with Nigeria’s The Guardian, Nigeria’s Accountant General Ahmed Idris denied receiving a NNPC message. He went on to dismiss any concerns that such a shortage could raise. He advised states to make contingency arrangements, but said there was no reason to panic.

Nigeria has laid out plans to end petroleum subsidization, but progress has been slow.

The FAAC gives money to the states. According to Dataphyte, it paid out 186.83 billion Naira ($491 million) to Delta State, the highest recipient in 2020.