The Nigerian National Petroleum Company Limited (NNPC Ltd) has publicly acknowledged facing significant financial strain due to its substantial debt to petrol suppliers, which some reports had put to about $6 billion.
This admission, made in a statement by Olufemi Soneye, the Chief Corporate Communications Officer of NNPC Ltd, on Sunday, September 1, 2024, highlights the severe pressure on the company and the potential threat to the sustainability of fuel supply in Nigeria.
“NNPC Ltd has acknowledged recent reports in national newspapers regarding the company's significant debt to petrol suppliers. This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply,” the press statement reads.
Reports have it that the debt, which has been accumulating over several months, has led to a critical situation where, at least, five international traders have halted fuel supplies to the NNPC, thus exacerbating the ongoing fuel scarcity across the country.
The company's alleged inability to pay its suppliers within the stipulated 90-day period, therefore has resulted in late payment compensation, further straining its financial resources.
Despite previous denials, the NNPC has now confirmed that the financial strain is impacting its ability to maintain a consistent supply of petroleum products.
NNPC however explained in the press statement that in line with the Petroleum Industry Act (PIA), it remains committed to its role as the supplier of last resort, ensuring national energy security.
The company, further noted that is working closely with relevant government agencies and other stakeholders to mitigate the effects of the financial strain and ensure a stable fuel supply nationwide.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” the press statement further reads.
The situation, nonetheless, has led to speculation that the Federal Government may stop paying subsidies on imported petrol, which could result in a significant price hike, potentially above N1,000 per liter.
Some Nigerians are therefore speculating that this move could allow private importers to enter the market, breaking the NNPC's monopoly on petrol imports.
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