NNPC commences payment of $6bn debt to suppliers

The Nigerian National Petroleum Company Limited (NNPCL) has officially commenced the process of settling its $6 billion debt.

This is according to the Minister of Finance and Coordinating Minister for the Economy, Wale Edun.

Edun addressed concerns about the NNPCL’s financial situation, which had become stressed due to its outstanding obligations to suppliers.

He explained that although the fuel subsidy was removed in May 2023, the company faced financial challenges due to foreign exchange costs.

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“In terms of NNPC and their situation, the reality is that although the subsidy was removed on May 29, 2023, and is no longer on the government’s balance sheet, it did rear its head—not in terms of petrol subsidy, but foreign exchange subsidy, which was borne elsewhere, mainly by NNPC,” Edun said during a meeting with investors in Washington, D.C., on Wednesday, October 23.

Expressing optimism about the company’s future, Edun stated: “I think what I can say about their own situation is with where they are now, they have a route to paying down their payables and I’m sure that in no time at all, they will start.

“From what I understand, they have even commenced the process of paying down their payables.”

Last month, the NNPCL had admitted to owing the sum of $6 billion to suppliers of premium motor spirit (PMS), also known as petrol.

Speaking on the issue, chief corporate communications officer, Olufemi Soneye, said the NNPCL is facing a serious financial strain due to the petrol supply costs — a development that is affecting the company’s ability to sustain PMS supply.