NNPC Admits to Mounting Debt Amidst Fuel Crisis

The NNPC’s statement reveals that it is grappling with severe financial strain, which is affecting its ability to maintain a stable fuel supply.

This situation is compounded by the plummeting value of the naira against the US dollar and rising international crude oil prices. These economic pressures have made it increasingly challenging for the NNPC to meet its growing debt obligations.

Earlier this year, international media reported on the NNPC’s financial difficulties. Despite these reports, the NNPC repeatedly denied that debt was responsible for the widespread fuel queues, attributing the issue instead to weather conditions, infrastructure problems, and other logistical challenges. Just two weeks ago, the company also dismissed claims of owing up to $6.8 billion to international traders.

However, the NNPC has now softened its stance, acknowledging that while credit transactions are typical in the oil trading sector, the scale of its debt is notably problematic. The company clarified that its subsidiaries are managing their payments on a first-in-first-out (FIFO) basis.

The impact of the financial crisis is visible nationwide. Fuel queues, once common in Abuja and surrounding states, have now extended to Lagos and other regions. Prices have surged dramatically, with some areas reporting costs as high as N1,000 per liter, far above the regulated rates set by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

In a statement, Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, acknowledged the strain caused by these debts. “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.”

Soneye assured that the NNPC remains committed to its role under the Petroleum Industry Act (PIA) as the supplier of last resort and is working closely with government agencies and stakeholders to ensure a consistent supply of petroleum products across the nation.