“NNPC Has Failed to Pay”: FG Clears Air on Debt as New Landing Cost of Petrol Emerges
- President Tinubu’s SA said NNPCL acknowledged facing financial difficulties since it was unable to continue providing fuel subsidies
- FG said that if the NNPCL continues to pay the difference between petrol prices, the national oil industry will go bankrupt
- It added that NNPC's debt resulted from the company's efforts to protect Nigerian consumers, not from government dishonesty
Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.
Bayo Onanuga, a special adviser to President Bola Tinubu on information and strategy, revealed in a post on X on Tuesday that the Nigerian National Petroleum Company Limited (NNPCL) Limited has acknowledged facing financial difficulties as a result of its inability to continue subsidising petrol.
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The national oil business will go bankrupt, he claimed, if the NNPCL keeps paying the difference between the landing cost and petrol price.
According to Onanuga, NNPC's debt was not the product of government deceit but rather the company's attempts to safeguard Nigerian consumers and absorb growing petrol costs.2
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“NNPC cried out recently because it can no longer sustain the price differential on its balance sheet without becoming insolvent,” he said.
“The situation has greater implications for the ability of the three tiers of government to function as the NNPC has failed to pay into the Federation Account, the money that should go to the government.
“There are no easy choices. Something must be done to make NNPC survive, and keep the engines of government running and petrol flowing at the pumps.
“That is the scenario that is unfolding, and the game changer and big relief giver may well be the Dangote refinery and other local refineries, which will become the fuel suppliers to the local market.
“When Dangote Refinery and other refineries, including government-owned Port Harcourt Refinery, come fully on stream, our country and economy will benefit on all fronts. There will be many good paying jobs that will be created along the value chain.”
Onanuga predicts that the enormous demand for foreign currency to import petroleum goods would also decline.
Prior to this, the NNPCL raised the price of petrol to N855 per liter; however, the Premium Motor Spirit (PMS) had a landing cost of almost N1,200.
Meanwhile, Nigerians have cried out as the scarcity of fuel and incease in petrol cost has cause many to spend a large chunk of their salaries on transportation.
Adewale David said,
"The situation has become worse that I now budget almost half of my salary to pay fot transport. This is so unfair to Nigerians"
Oil marketers warn Nigerians to prepare
Legit.ng reported that Billy Gilly-Harry, the president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), has warned Nigerians to expect an increase in petrol prices shortly, stating that fuel will now be sold at prevailing market rates.
He made this statement while appearing on Channels Television's Morning Brief on Tuesday, September 3, 2024.
Gilly-Harry also indicated that maintaining the current petrol price of around N600 per litre may become unsustainable as the Nigerian National Petroleum Company Limited faces challenges in ensuring adequate fuel supply across the country.
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Source: Legit.ng
