Reports have emerged indicating that the Nigerian National Petroleum Company (NNPC) Limited is owing a substantial debt estimated at around $3 billion owed to fuel traders for imported petrol.Â
This revelation, verified by three separate sources as reported by Reuters on Monday, sheds light on the financial challenges faced by NNPC amidst the recent removal of petrol subsidies within the country.
The decision to remove the subsidy on petrol was officially announced by President Bola Tinubu on May 29, 2023.
This policy shift immediately triggered a surge in the price of petrol, consequently fueling inflation across various sectors.
President Tinubu defended the decision, stating that while it was a difficult move, it was deemed necessary to safeguard the nation’s energy future.
Despite the assurance from NNPC’s spokesperson, Femi Sonoye, that the company is not aware of such a substantial debt nor facing financial issues of such magnitude, reports suggest otherwise.
NNPC, being a major importer of petrol in Nigeria, is reportedly struggling to fulfill its payment obligations for imported petrol.
Factors such as the continual depreciation of the naira and the escalating global fuel prices are cited as major impediments to timely payments.
According to sources, NNPC is now taking more than the stipulated 90 days to settle its dues, with payment delays stretching to over 130 days.
Despite these financial hurdles, NNPC’s suppliers, which include prominent international traders like Vitol, Mercuria, and Gunvor, along with domestic trading houses, are continuing to supply fuel to the company.
However, the situation has prompted concerns within the industry and among stakeholders regarding the stability and reliability of fuel supply in Nigeria.
On February 29, the federal government disclosed a significant drop in petrol importation by 50 percent since the subsidy removal. Mohammed Idris, the Minister of Information and National Orientation, attributed this decline to the policy change.
While this reduction may signify a shift towards self-sufficiency in petrol production or a potential adjustment period, it also underscores the far-reaching implications of subsidy removal on the country’s energy dynamics and economic landscape.
