The Nigerian National Petroleum Company Limited (NNPC Ltd) has raised alarms about its ability to sustain regular petrol supply across the country, citing significant financial strain due to escalating Premium Motor Spirit (PMS) supply costs. This financial pressure is now threatening the stability of fuel supply in Nigeria, according to Olufemi Soneye, the company's Chief Corporate Communications Officer.
In a statement released on Sunday, Soneye acknowledged the company’s considerable debt to petrol suppliers, which has been highlighted in recent media reports. The NNPC’s financial difficulties stem from the gap between fixed pump prices and rising international fuel costs, exacerbated by the fluctuating exchange rate of the Naira against the dollar.
The NNPC, under the Petroleum Industry Act (PIA), says the statement, has remained committed to its role as the supplier of last resort to ensure national energy security. However, the financial burden has become increasingly unsustainable, placing the company under intense pressure. "We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide," Soneye stated.
Recent reports suggest that Nigeria’s debt to petroleum product suppliers has surpassed $6 billion, doubling since April 2024. This growing debt has coincided with worsening fuel scarcity across major Nigerian cities, leading to long queues at petrol stations, skyrocketing prices, and a rise in transport costs.
The ongoing fuel crisis, coupled with NNPC's financial woes, has fueled speculation of an imminent hike in petrol prices. Analysts warn that this could see prices soar to between N950 and N1,000 per liter, marking the fourth price hike in 15 months. The Federal Government, which had previously admitted to paying subsidies on petrol despite earlier denials, faces increasing pressure to address the situation.
Experts suggest that the NNPC’s financial difficulties are partly due to the government's reluctance to allow petrol to be sold at an economic price, which would reduce the financial strain on NNPC and encourage private sector participation in fuel importation. The situation is further complicated by Nigeria's declining crude oil output, which has hampered the country’s capacity to import refined products.
As the NNPC struggles to navigate these financial challenges, Nigerians continue to feel the impact of the fuel crisis, with no immediate relief in sight.
