Petrol Price: NNPCL's Financial Strain Sparks Fears Amidst $6.8 Billion Debt

The Nigerian National Petroleum Company Limited (NNPCL) has recently admitted to facing significant financial constraints, raising concerns about a potential increase in the pump price of Premium Motor Spirit (petrol).

This development comes amidst prolonged fuel scarcity across Nigeria. Olufemi Soneye, NNPCL’s spokesperson, revealed on Sunday that the company is under immense pressure due to high fuel supply costs. "This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply," Soneye stated.

The root of the issue lies in the $6.8 billion debt that NNPCL owes to international oil suppliers. As the sole supplier of PMS in Nigeria, NNPCL is struggling to maintain the current petrol prices, which range between N617 and N720 per litre.

The Major Energy Marketers Association of Nigeria (MEMAN) had previously highlighted that the landing cost of petrol stands at N1,117 per litre.

Despite NNPCL's repeated denials of paying fuel subsidies, the company has admitted to covering importation shortfalls between itself and the federation.

This admission has further fueled speculations about an imminent price hike. MS Ingawa, an aide to the Minister of Housing and Urban Development, Ahmed Dangiwa, suggested two immediate solutions to alleviate the financial burden on NNPCL.

"The only immediate options now are: Increase the pump price of PMS to reduce the burden of subsidy on NNPCL. This will not even bring quick and enough money for NNPCL, or raise money through asset or equity sale to offset debt and properly plan," Ingawa posted on his X handle on Sunday.