The Nigerian National Petroleum Company Limited (NNPCL) has finally acknowledged its “significant debt to petrol suppliers,” stating that this financial burden threatens the stability of fuel supply in the country. Reports suggest that the $6 billion debt owed by NNPCL to petrol suppliers has exacerbated the persistent fuel scarcity in Nigeria, an issue that has plagued the nation since early 2024.
While NNPCL has previously attributed the fuel shortages to various factors such as logistics challenges and flooding, the company’s spokesman, Olufemi Soneye, confirmed in a statement on Sunday that the financial strain is a major concern. He noted, "This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply."
Soneye further emphasized that, in accordance with the Petroleum Industry Act (PIA), NNPCL remains committed to its role as the supplier of last resort, ensuring national energy security. The company is working closely with government agencies and other stakeholders to maintain a steady supply of petroleum products across the nation.
Nigeria, the most populous country in Africa, faces significant energy challenges, with all its state-owned refineries currently non-operational. As a result, the country heavily relies on imported refined petroleum products, with NNPCL being the primary importer. Fuel queues have become a common sight, and the price of petrol has tripled since the removal of the subsidy in May 2023, rising from around ₦200 per litre to approximately ₦800 per litre. This price hike has added to the struggles of citizens who depend on petrol for their vehicles and generators due to the country’s longstanding unreliable electricity supply.
The government’s recent decision to unify forex windows has further strained the economy, causing the value of the naira to plummet from ₦700 per dollar to over ₦1600 per dollar in the parallel market. This currency devaluation has led to a sharp increase in the prices of food and basic commodities, leaving Nigerians to grapple with rising inflation.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) recently stated that the high landing cost of petrol has made it difficult for marketers to import the product, leaving NNPCL as the sole importer. According to IPMAN’s National Operations Controller, Zarama Mustapha, the landing cost of Premium Motor Spirit (PMS) currently exceeds ₦1,200 per litre, excluding marketers’ margins, transportation, and other logistics costs. He highlighted that NNPCL sells to marketers at around ₦565 per litre, indicating an implicit subsidy of nearly ₦600 to₦700 per litre.
In December, Africa’s leading industrialist, Aliko Dangote, began operations at his $20 billion refinery in Lagos, which has a capacity of 350,000 barrels per day. The refinery, which has faced regulatory challenges, aims to reach its full capacity of 650,000 barrels per day by the end of the year. It has already started supplying diesel and aviation fuel to marketers in Nigeria, with petrol supply expected to commence soon.
