The Nigerian National Petroleum Company (NNPC) Limited has
admitted to owing suppliers of premium motor spirit (PMS), also known as
petrol.
In a statement on Sunday by Olufemi Soneye, the company’s
chief corporate communications officer, NNPC said it is facing financial strain
due to the petrol supply costs, and this is affecting the company’s ability to
sustain PMS supply.
Earlier today, some Nigerian newspapers reported that the
lingering petrol scarcity in many parts of the country has been worsened by a
$6 billion debt NNPC owes suppliers.
There have been reports of petrol scarcity since May, with
the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN)
blaming it on contractual issues between mother and daughter vessels.
In July, NNPC faulted flooding and weather concerns, as well as a hitch in the discharge operations of a couple of vessels for the lingering petrol scarcity.
While admitting to the debt on Sunday, NNPC said the
financial strain threatens the supply of petrol.
“NNPC Ltd. has acknowledged recent reports in national
newspapers regarding the company’s significant debt to petrol suppliers,” the
company said.
“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.”
On August 26, Heineken Lokpobiri, minister of state for
petroleum resources, (oil), said NNPC was selling petrol below the landing
cost.
He said this is fueling petrol smuggling to neighbouring.
Also, on August 20, Umar Ajiya, the chief financial officer
(CFO) of the NNPC, said the company was selling petrol at only half the land
cost.
The official pump price of petrol is about N600/litre but
the landing cost is around N1,200.
According to Ajiya, it cost the NNPC N7.8 trillion to
subsidise PMS from January to July.
NNPC had initially denied subsidising petrol after TheCable
reported on August 19 that President Bola Tinubu approved a request by the
company to utilise the 2023 final dividends due to the federation to pay for
the petrol subsidy.
In a report by Agora Policy, an Abuja-based think tank, on
August 22, petrol subsidy rose to N1.16 trillion in 2021, N2.91 trillion in
2022, and N5.10 trillion in 2023, while it stood at N4.2 trillion in the first
seven months of this year.
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