The Nigerian National Petroleum Company Limited (NNPCL) has acknowledged its “significant debt to petrol suppliers,” admitting that this financial burden threatens the sustainability of fuel supply across the country.

Reports have indicated that the NNPCL owes petrol suppliers $6 billion, exacerbating the persistent fuel scarcity that has plagued Nigeria since early 2024. The company had previously cited logistical challenges, flooding, and other issues as reasons for the shortages.

In a statement released on Sunday, NNPCL spokesperson Olufemi Soneye said, “This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.” He emphasised that the NNPCL remains committed to its role as the supplier of last resort, in accordance with the Petroleum Industry Act (PIA), ensuring national energy security.

“We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” Soneye added.

Nigeria, Africa’s most populous nation, faces significant energy challenges, with all its state-owned refineries currently non-operational. The country relies heavily on imported refined petroleum products, with the state-run NNPCL serving as the major importer.

Fuel queues have become a common sight in Nigeria, with petrol prices tripling since the removal of subsidies in May 2023, rising from approximately ₦200 per litre to around ₦800 per litre. This has added to the woes of citizens who rely on petrol to power their vehicles and generators, given the country’s longstanding issues with erratic electricity supply.

The government’s simultaneous unification of forex windows has seen the naira’s value plunge dramatically from ₦700 to over ₦1,600 per US dollar on the parallel market, driving up the prices of food and basic commodities and compounding the inflationary pressures faced by Nigerians.

Recently, the Independent Petroleum Marketers Association of Nigeria (IPMAN) stated that the current landing cost of petrol makes it unfeasible for marketers to import the commodity independently, leaving NNPCL as the sole importer.

“At present, the landing cost of petrol is over ₦1,200 per litre, excluding the marketers’ margin, transportation, and other logistics costs,” said IPMAN National Operations Controller, Zarama Mustapha. “NNPCL sells to marketers at about ₦565, which implies a subsidy of nearly ₦600 to ₦700 per litre.”

Last December, Africa’s leading industrialist, Aliko Dangote, began operations at his $20 billion refinery in Lagos, which has a capacity of 350,000 barrels per day. The facility, which has faced regulatory hurdles, aims to reach its full capacity of 650,000 barrels per day by the end of the year. The refinery has started supplying diesel and aviation fuel to local marketers, with petrol supply expected to commence soon.