According to sources, Nigeria’s state-owned oil company NNPC is facing a significant challenge with a payment backlog of approximately $3 billion owed to fuel traders for imported petrol. The depreciation of the naira currency and the surge in global fuel prices have exacerbated the situation, leading to increased effective subsidies being paid by NNPC.
This backlog poses a setback to the government’s efforts to stabilize the finances of Africa’s largest economy by reducing costly energy subsidies. While NNPC is making payments, the process is described as slow, with delays extending beyond the standard 90-day period to over 130 days, as reported by multiple sources.
In response, an NNPC spokesperson denied knowledge of such a substantial debt or financial issues of this magnitude, emphasizing the company’s commitment to ensuring petroleum product supply sufficiency in Nigeria. Despite the payment challenges, NNPC’s suppliers, including renowned international traders and local trading houses, continue to provide fuel to the country.
The delayed payments highlight the reemergence of fuel subsidies, which were abolished in May 2023, putting pressure on NNPC’s financial resources for imports and affecting its contributions to the government led by President Bola Tinubu.