Edun Says NNPC Offsetting $6bn Petrol Supply Debt

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, has said the Nigerian National Petroleum Company (NNPC) Limited has commenced the repayment of a significant $6 billion debt owed to suppliers of premium motor spirit (PMS), also known as petrol.

Mr Edun made this announcement during a meeting with investors in Washington, the US capital on the sidelines of the 2024 annual meetings of the International Monetary Fund (IMF) and the World Bank.

The revelation came amidst growing concerns about the NNPC’s financial stability and its capacity to sustain petrol supply to the domestic market.

The company had previously acknowledged owing a substantial debt to suppliers of premium motor spirit (PMS).

Addressing the issue of ongoing foreign exchange subsidies, Minister Edun clarified that “In terms of NNPC and their situation, the reality is that, although the subsidy on May 29, 2023, was removed and was no longer on the balance sheet of the government, it did rear its head, not in terms of petrol subsidy, but foreign exchange subsidy, which was borne elsewhere, and borne mainly by NNPC,” the minister said.

Mr Edun also expressed optimism about the company’s future.

“I think what I can say about their 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,” he said.

Business Post had in August reported that the state oil firm claims that it owes international oil traders about $6.8 billion.

According to Mr Olufemi Soneye, the spokesperson of the company, the firm said it is normal to owe at one point or the other since the oil trading business, transactions are carried out on credit.

“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,” he said.

The World Bank also recently recommended that the Nigerian government audit the books of the state energy company.