Petrol Import Costs: NNPC Admits Financial Strain

The Nigeria National Petroleum Corporation Limited (NNPCL) has confirmed significant financial strain due to debt owed to international petrol suppliers.

The company has remained the sole importer of petrol into the country following the foreign exchange crisis that has resulted in significant increase in price differentials between the landing costs and the retail price of the product.

Recall that the media had earlier reported that the NNPC is owing a backlog of approximately $6 billion to fuel traders for imported petrol.

The NNPCL, in a statement said this situation threatens the sustainability of fuel supply in Nigeria.

Reports indicate that the national oil company is grappling with delayed payments that now exceed 130 days, far longer than the standard 90 days.

Despite this financial pressure, NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, in a statement said the Corpoy remains committed to its role as the supplier of last resort under the Petroleum Industry Act (PIA).

According to him, the company is working closely with government agencies and stakeholders to ensure stable supply of petroleum products across the nation.

“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.

“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 company stated.

The challenges are compounded by rising global fuel prices and depreciating naira, which have increased the effective subsidy costs for the Nigerian government.
This has led to a creeping return of fuel subsidies, which were officially removed in May 2023, further straining NNPC’s finances and complicating efforts to stabilise the economy.

Soneye emphasised the company’s focus on maintaining fuel supply despite the financial hurdles, assuring that they are actively addressing the situation.