There are indications that the pump price of premium motor spirit, popularly known as petrol, may rise in filling stations as the Nigerian National Petroleum Company Limited finally admitted that it was facing challenges due to a $6bn debt after weeks of denial, the NNPC admitted yesterday that it owed its petrol suppliers the sum of $6bn, saying it was facing financial strains due to petrol supply costs.
In a statement by its Chief Corporate Communications Officer, Olufemi Soneye, the state-owned energy company subtly confirmed that the debt was the reason for the fuel queues in filling stations across the country, stating that it is impacting supply sustainability.
It was reported in July that Nigeria’s debt to suppliers of petrol surpassed $6bn, making the NNPC struggle to cover the gap between fixed pump prices and international fuel costs the report stated that the national oil company began struggling early this year when late PMS payments surpassed $3bn.
The company had still not paid for some January imports, traders said, and the debt keeps piling up. Under contract terms, NNPC is meant to pay within 90 days of delivery the only reason traders are putting up with it is the $250,000 a month (per cargo) for late payment compensation,” one industry source said.
The NNPC has also given various reasons for the lingering fuel crisis, including bad weather and the inability of vessels to discharge, among others, but none of the measures it has taken stopped the queues at the filling stations.
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