Global suppliers of petrol are increasingly hesitant to continue providing fuel on credit to the Nigerian National Petroleum Company Limited (NNPCL) due to a mounting debt of over $6 billion, Sunday Vanguard has learned.
Industry insiders disclosed that the NNPCL, which is the sole importer of petrol into Nigeria through supply agents, is facing significant financial strain from unpaid debts that have accumulated over time. This financial burden is believed to be a key factor behind the recent disruptions in fuel supply across the country.
According to a source familiar with the importation process, at least five vessels scheduled to deliver petrol to Nigeria have refused to offload their cargo due to concerns that they would not be paid on delivery. This situation has forced the NNPCL to ration its existing stock and plead with long-term suppliers to continue their deliveries despite the debt.
An NNPC official, speaking on condition of anonymity, acknowledged the challenges the company faces in meeting the demands of fuel dealers, citing a shortage of products. “Bulk sales of ships and trucks to depot owners have slowed down in the last five days due to the supply shortage,” the official said. The source further noted that no bulk sales had occurred since Tuesday, exacerbating the scarcity in the downstream sector.
Another NNPC staff member attributed the ongoing fuel shortages and the resulting long queues over the past two months to the reduced supply from creditors wary of the NNPC’s outstanding liabilities. The official admitted that while the Federal Government had intervened in mid-August with a $300 million payment to help settle some of the debts and restore supplier confidence, this amount only provided temporary relief. “It helped us get some reprieve for about a week before the queues fully returned,” the official explained.
NNPC Defends Credit Transactions as Industry Standard
In response to the situation, NNPCL’s Chief Corporate Communications Officer, Mr. Femi Soneye, stated that trading on credit is a standard practice in the global oil industry. “In the oil trading business, transactions are often carried out on credit; so it is normal to have outstanding balances at certain times,” Soneye said. He also noted that NNPC Trading, a subsidiary of the company, maintains open trade credit lines with several international traders.
However, when pressed for the exact amount the NNPCL owes its petrol suppliers, Soneye declined to provide specifics, stating, “I will need some time to provide you with the exact amount.”
