The Nigerian National Petroleum Company Limited (NNPC) has attributed the Company’s inability to supply sufficient Premium Motor Spirit (PMS) across the nation to significant debt to petrol suppliers.
According to a press release issued by the Company’s Chief Corporate Communications Officer, Olufemi Soneye on 1st September,2024, this financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply.
At the inception of the fuel scarcity, the NNPC Limited Executive Vice President, Downstream, Mr. Dapo Segun apologized to Nigerians, attributing the problem to rains, lightning and thunderstorms.
He appealed for understanding from Nigerians, saying that the Company is working with relevant stakeholders to address the distribution, evacuation and logistics challenges.
However, the company condemned reports that revealed that it is indebted to international oil traders to the tune of $6.8bn and that it has not remitted revenues to the Federation Account since January.
A statement that condemns the alleged debt issued on 18th August 2024 reads ” NNPC Ltd. does not owe the sum of $6.8bn to any international trader(s). In the oil trading business, transactions are carried out on credit, and so it is normal to owe at one point or the other. But NNPC Ltd., through its subsidiary, NNPC Trading, has many open trade credit lines from several traders. The company is paying its obligations of related invoices on a first-in-first-out (FIFO) basis”
“It is not correct to say that NNPC Ltd. has not remitted any money to the Federation Account since January. NNPC Ltd. and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly. This is in addition to payments of CIT to road contractors under the Road Investment Tax Credit Scheme. In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC)”
Recently, in a World Press Conference, the NNPC Limited released its 2023 Audited Financial Statement (AFS), declaring a net profit of N3.297 trillion at the close of the financial year which ended in December 2023, an increase of over N700 billion (28%) when compared to the 2022 profit of N2.548 trillion.
The Chief Financial Officer of the Company, Mr. Umar Ajiya said “Despite inherent challenges of our operational and economic environment, we have improved the productivity and the financial performance of this great company”
Ajiya also debunked claims on subsidy payment, saying the Company was only taking care of PMS importation shortfall between it and the Federation.
It is recalled that in 2021, NNPC declared a profit in its operations for the first time. From a loss position of N803 billion in 2018, it reduced the loss further down to N1.7 billion in 2019.
However, in 2020, it posted its ‘first ever’ profit of N287 billion, then in 2021, it recorded a N674.1 billion profit and in 2022, the profit grew to N2.548 trillion, an unprecedented achievement in its financial performance. The N3.297 trillion profit declared for 2023 is the highest since the Company’s inception, 46 years ago.
Olufemi Soneye assured that being the only hope for fuel supply in the nation, the company is working alongside the government and stakeholders to ensure stable supply of PMS.
“In line with the Petroleum Industry Act (PIA), NNPC Ltd. remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide” he wrote.
