The managing director of the Petroleum Products Marketing Company (PPMC), Umar Ajiya has said that the act establishing the NNPC covers for any extra cost incurred on importation.
Ajiya was speaking on Sunrise Daily, a programme on Channels TV, on Friday.
PPMC, a subsidiary of NNPC, handles the distribution of petroleum products.
Senators had described the extra payments on petrol as illegal because the oil firm did not seek approval from parliament.
But Ajiya disagreed with their position.
“The act establishing us, and the national assembly knows clearly that in that same act, there is a provision that we can run our operations and recover our cost fully,” he said.
“There is a difference between the landing cost and the price we are selling clearly but that is part of our core structure.
“The NNPC act is a law in itself and the national assembly is the one responsible for enacting laws so if there is any remedy or solution as one of the senators said, the issue is to look into the act establishing these entities NNPC, CBN etc.”
However, Ajiya refused to use the term subsidy, saying: “For us, it is not a question of subsidy, we don’t know what subsidy is because it was not budgeted for. ”
During the height of petrol scarcity in December, Maikanti Baru, NNPC group managing director, said the landing cost of petrol had increased to N171.
Marketers had complained that they could not be selling the products at N145 when the landing had reached N171.
But Ajiya agreed that the corporation had been paying N26 to make up for the gap between the landing cost and approved pump price.
He said being the sole importer has put a burden on the finances of NNPC.
“It’s not totally in favour of NNPC. Let me clarify one fact, NNPC is not desirous of being the sole importer of products because for one, it puts a severe burden on our financial position as a corporation,” he said.
“It is a welcome idea if there are opportunities for private marketers to import, it is a highly welcome idea.”