Nigeria’s NNPC Incurs $3 Billion Debt to Fuel Traders Amid Rising Petrol Prices

Date:

  • De-facto Subsidy Returns as Petrol Prices Rise
  • Traders Continue to Supply Nigeria Despite Payment Delays
  • Fuel and Power Subsidies Could Shave 3% from GDP in 2024 – IMF

**LONDON/BRUSSELS, April 8 – Nigeria’s state-owned oil company NNPC is reportedly in debt to fuel traders to the tune of around $3 billion for imported petrol, sources told Reuters. The payment backlog, attributed to the tumbling naira currency and rising global fuel prices, suggests the return of de-facto subsidies, despite Nigeria’s efforts to curb costly energy subsidies.

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The payment delays, averaging more than 130 days instead of the usual 90, are hindering the government’s attempts to shore up finances. NNPC’s suppliers, including international traders and Nigeria-based trading houses, continue to supply fuel despite the delays.

The creeping return of fuel subsidies, abolished in May 2023, is impacting NNPC’s cash flow for imports and government revenues. Nigeria, heavily reliant on fuel imports due to mismanagement and under-investment in refineries, is facing logistical challenges leading to fuel shortages.

Rising global gasoline prices and a weaker naira have further strained NNPC’s ability to import fuel, leaving it as the sole importer in the country. The International Monetary Fund (IMF) warns that subsidies could shave up to 3% off GDP in 2024, underscoring the need for a sustainable solution.


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Gbenga Samson
Gbenga Samsonhttp://ThisDayLive.com
Samson Gbenga Salau [Editorial Board Adviser] Gbenga Samuel Salau is a professional journalist with over 17 years experience in journalism, he is a graduate of Communication and Language Arts, University of Ibadan. On completion of his youth service, he joined The Guardian as a freelance journalist and was later absorbed as a staff. While in the University, he was a campus journalist reporting for the Independence Hall and Faculty of Arts Press Clubs. As a campus journalist, he won the following awards; Independence Hall Press Best News writer; University of Ibadan Union of Campus Journalists’ Best News Reporter/Writer; First Runner-up, Reuben Abati Award for Investigative Journalism; Association of Faculty of Arts Students’ Press Best Reporter; University of Ibadan Union of Campus Journalists’ Best Political Writer; Winner, Reuben Abati Award for Investigative Journalism, and University of Ibadan Union of Campus Journalists’ Best Interviewer. He served the Association of Communication and Language Arts Students, as the Public Relation Officer, the same year he was appointed the News Editor of the Association of Faculty of Arts Students Press. The following session, he was made the General Editor, and a member of the 13-man University of Ibadan Students’ Union Transition Committee. As a reporter in The Guardian, in 2014, he won the Promasidor Quill Award Best Report on Nutrition and DAME Business Reporting category. In the 2015 edition of the Promasidor Quill Award, he won the best Report on Nutrition and Brand Advocate Categories, while in 2016, he won the NMMA Print Journalist of the Year, first runner-up Golden Pen Reporter of the Year and SERAs CSR Awards. Gbenga Salau loves traveling, reading, and listening to songs with good lyrics no matter the genre.

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