NNPCL’s ‘financial strain’, a game plan to increase pump price – Experts

The announcement of the Nigerian National Petroleum Corporation Limited (NNPCL) on being unable to sustain fuel supply is a game plan, according to experts.

On Sunday, Chief Corporate Communications Officer of the NNPCL, Olufemi Soneye, admitted that the national oil company is owing suppliers, but did not specify the exact amount.

“NNPC Ltd has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers. This financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply,” Soneye said in a statement.

Experts have, however, suggested that the announcement is part of a game plan from the government, which may lead to 950/1,000 per litre price for petrol.

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They alleged that government officials had been pushing this narrative in the last two weeks.

The Minister of State for Petroleum, Heineken Lokpobiri, had, on Monday, asked the NNPCL to halt the sale of fuel below landing costs, arguing that this would help curb smuggling to neighbouring countries.

The Major Energy Marketers Association of Nigeria (MEMAN) recently disclosed that  the landing cost of petrol as of July, 2024, was N1,117 per litre.

It also revealed the landing costs of AGO (Diesel) at N1,157 for a 20KT vessel and ATK at N1,217 for a 15KT vessel landing in Apapa, Lagos.

“The NNPCL remains the main importer, with private importation remaining limited. This situation is worsened by Nigeria’s declining crude oil output, which impacts the country’s capacity to import refined products. The Organisation of Petroleum Exporting Countries (OPEC) has noted the dwindling output of many nations, including Nigeria”, the marketer said.

A former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Ejigbo Depot in Lagos, Mr Akin Akinade recently said: “Our members have no direct supply from NNPC. We buy from Third Party. We buy at DAPMAN Depot in Abule Ado.

“They sell to us N840, N850, and by the time you add transportation to that, there is no way our members would sell less than they are selling. If they bring down their price, we are also going to bring down our price. We are in business to make money”, he said.

In a chat with Daily Trust, Chief Executive Officer, 11 Plc (formerly Mobil Nigeria), Tunji Oyebanji said: “Selling below the cost, whether from import or local refineries, is not sustainable. If they sell at economic price, perhaps others can import, supply will improve, and the financial strain will not be on them alone. It’s either that or these supply disruptions will continue indefinitely.  I am baffled why they have not been upfront about this since instead of denials.”