Business

REVEALED: How $6 Billion NNPC Debt Is Causing Petrol Supply Hiccups

Published

10 months ago

September 1, 2024

Global suppliers of petrol are no longer enthusiastic about supplying the product on credit to the Nigeria National Petroleum Company Limited (NNPCL) due to piling debts, Sunday Vanguard has learnt.

Competent industry sources told our correspondent last night that NNPCL, which solely imports the product using supply agents, is apparently weighed down by over $6 billion in debt, which the firm has not settled over time.

The setback, according to informed sources, is apparently responsible for the lingering hiccups in fuel supply in recent weeks, our correspondent gathered.

One of the sources familiar with the PMS importation into the country revealed that, at the moment, no fewer than five vessels which were primed to supply petrol to Nigeria have refused to discharge the product to NNPC due to fear that they would not be paid cash on delivery.

The insider pointed out that the mounting debt has heightened the pressure on the petroleum company, which has now resorted to rationing its stock and appealing to its long-term suppliers to not cut off supply.

A senior official at the NNPC, who spoke on the condition of anonymity, said the company is struggling to supply dealers due to a shortage of products at its disposal.

The official lamented: “Bulk sales of ships and trucks to depot owners have slowed down in the last five days due to shortage of supply”.

The source added that no bulk sales had taken place since Tuesday, resulting in the scarcity in the downstream sector.
Another NNPC staff told this newspaper that fuel shortage, which resulted in the long queues being experienced in the last two months, was principally caused by the reduction in supply of products by suppliers who are being owed by the Nigerian oil firm.

The top official admitted: “I was aware that at some points in mid-August, the Federal Government had to come in by giving money to NNPC to defray some of the outstanding liabilities and boost the confidence of the suppliers to continue.

“However, what was paid was about $300 million, which only helped us get some reprieve for about a week before the queues fully returned,” he said.

Credit transaction common in the oil business – NNPC
Responding, the Chief Corporate Communications Officer of NNPCL, Mr Femi Soneye, said it was a common practice in the global oil industry to trade on credit but would not say more than that.

Soneye said: “In the oil trading business, transactions are often carried out on credit; so it is normal to have outstanding balances at certain times.

“Additionally, through our subsidiary, NNPC Trading, we maintain open trade credit lines with several traders.”

But when asked to confirm the exact amount the company owes its PMS suppliers, the spokesperson declined, saying, “I will need some time to provide you with the exact amount”.
VANGUARD

Business

Naira Depreciates Against Dollar

Published

1 week ago

July 4, 2025

Editor

The Naira experienced a slight depreciation on Friday at the official market, trading at N1,528.56 to the dollar.

Data obtained from the website of the Central Bank of Nigeria (CBN) showed that the Naira lost N2.73.

This represents a 0.17 percent loss compared to the N1,525.82 recorded on Thursday.

The Naira, which opened the week on Monday with a gain of N9.52 against the dollar, held steady gains until Thursday.

On Wednesday, the local currency gained N3.42 against the dollar and received commendation from the International Monetary Fund (IMF).

The IMF, in its 2025 Article IV Consultation report on Nigeria, commended the CBN for its reforms to the foreign exchange market, which supported price discovery and liquidity.

Business

JUST IN: Dangote Refinery Hikes Petrol Ex-depot Price

Published

3 weeks ago

June 20, 2025

Editor

Nigerians may soon pay more for petrol as the Dangote Petroleum Refinery on Friday increased its ex-depot price for Premium Motor Spirit to N880 per litre, raising fresh concerns over fuel affordability and price volatility in the downstream sector.

Checks on petroleumprice.ng, a platform tracking daily product prices, and a Pro Forma Invoice seen by The PUNCH confirmed the hike, representing a N55 increase from the previous rate of N825 per litre.

The increment would ripple across the entire fuel distribution chain, likely pushing pump prices above N900/litre in some parts of the country, especially in areas far from the distribution hubs.

The hike comes despite global crude prices falling. Brent crude dipped by 3.02% to $76.47, WTI fell to $74.93, and Murban dropped to $76.97 on Friday. The decline in benchmarks offers little relief due to persistent fears of sudden supply disruptions.

The refinery has increased its reliance on imported U.S. crude and operational costs amid exchange rate instability, which adds to its pricing pressure.

On Thursday, the President of the Dangote Group, Aliko Dangote, said his 650,000-barrel capacity refinery is “increasingly” relying on the United States for crude oil.

This came as findings showed that the Dangote Petroleum Refinery is projected to import a total of 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered in the past two months, amid ongoing allocations under the Federal Government’s naira-for-crude policy.

Dangote informed the Technical Committee of the One-Stop Shop for the sale of crude and refined products in naira initiative that the refinery was still battling crude shortages, which had led it to resort to imports from the United States.

On Monday, the president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, Festus Osifo, accused oil marketers of exploiting Nigerians through inflated petrol prices, insisting that the current pump price of PMS should range between N700 and N750 per litre.

He criticised the disparity between falling global crude oil prices and the stagnant retail price of petrol in Nigeria.

“If you go online and check the PLAT cost per cubic metre of PMS, convert that to litres and then to our Naira, you will see that with crude at around $60 per barrel, petrol should be retailing between N700 and N750 per litre.”

He asserted that if Nigerians bear the brunt of higher fuel costs, they should be allowed to enjoy the benefit of low pricing.

His forecast of increased costs now appears spot on, considering the latest developments.

Marketers are already adjusting. Depot owners and fuel distributors in Lagos and other cities anticipate a domino effect, with new price bands expected to follow Dangote’s lead.

Many had held back pricing decisions since Tuesday, when the refinery halted sales and withheld fresh PFIs. The delay fueled speculation, allowing opportunistic price hikes across various depots.

Business

Naira Appreciates At Official Market

Published

2 months ago

May 24, 2025

Editor

The Naira, which has seen steady appreciation against the Dollar all week, closed stronger on Friday, trading at ₦1,580.44 in the official forex market.

Data from the Central Bank of Nigeria’s website show the Naira gained ₦4.51k against the Dollar on Friday alone.

This marks a 0.28 per cent appreciation from Thursday’s closing rate of ₦1,584.95 in the official foreign exchange window.

The local currency maintained consistent strength throughout the week, recording gains daily.

On Monday, May 19, it traded at ₦1,598.68; on Tuesday, at ₦1,590.45; and on Wednesday, at ₦1,584.49.

These gains suggest increased investor confidence and improved forex supply, contributing to the naira’s performance.

Meanwhile, the CBN, at its 300th Monetary Policy Committee meeting held Monday and Tuesday, retained the Monetary Policy Rate at 27.5 per cent.