Nigeria’s state-owned Nigerian National Petroleum Company Limited (NNPC) is facing a mounting debt crisis in its petrol imports, which has now exceeded $6 billion. This sharp increase from earlier figures in April reflects NNPC’s challenges in bridging the gap between subsidized domestic pump prices and higher international fuel costs.
Despite NNPC’s denial, industry sources indicate that outstanding payments to petrol suppliers, dating back to January, range between $4 billion and $5 billion.
Traders have begun limiting credit to Nigeria due to these unpaid debts, leading to reduced petrol import volumes in recent tenders for June and July.
This reduction in imports, down to approximately 850,000 tonnes in July from the usual million tonnes, underscores the financial strain on NNPC and the broader implications for Nigeria’s fuel supply chain and economy.
President Bola Tinubu’s decision to end fuel subsidies last year aimed to mitigate rising costs and manage fiscal pressures, but a subsequent cap on pump prices and currency devaluation have effectively reintroduced subsidies, contrary to official claims.
Nigeria, despite being Africa’s largest oil producer, continues to rely heavily on fuel imports due to underdeveloped domestic refineries, including the newly operational Dangote refinery, which has yet to produce petrol for the local market.