NNPC blames “financial strain” for petrol scarcity, a hint price may rise

The Nigerian National Petroleum Corporation (NNPC) Ltd. says it is facing a “financial strain” that is affecting the supply of petrol in the country, a rare admission that suggests the state-run company may be planning a price increase.

In a statement on Sunday, the company said it was facing “significant debt” to suppliers and that had caused considerable pressure and a threat to supplies.

“NNPC Ltd. has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply,” it said.

The rare admission comes amid a prolonged fuel shortage in the country, with citizens struggling to buy petrol despite the removal of the import cost subsidy over a year ago that the government said will ensure product availability.

The NNPC remains the sole importer of petrol in Nigeria and has been maintaining a pump price of N617 per litre since June 2023. However, the company’s recent statement has sparked concerns that an increase in petrol prices may be imminent.

This comes amid the NNPC’s reputation for a lack of transparency and involvement in various controversies.

Despite Nigeria being one of the world’s major oil producers, the country remains unable to refine and produce enough fuel domestically. The Port Harcourt refinery, for example, has remained non-functional even after a $1.5 billion rehabilitation project by the NNPC.

Additionally, the NNPC has been accused of refusing to supply crude oil to the privately owned Dangote Refinery for domestic fuel production, an allegation it denied.

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Many Nigerians have also raised concerns about the company’s recent financial claims, noting that just last week, the NNPC announced a record profit of N3.3 trillion for the year 2023, despite now citing significant financial strain.

“This is September; our refineries are still unproductive. Where is the refined oil that is produced by our local refineries? Where is the record profit you posted? Where is the Dangote supply? Are you paying a subsidy?” asked Faisal Kurfi, who posted on X, formerly Twitter.

The chief corporate communications officer of NNPC, Olufemi Soneye, said the company is exploring solutions to address the problem, without saying how.

“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,” he said.