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NNPC owes fuel importers $3bn subsidy backlog – Report

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NNPC owes fuel importers $3bn subsidy backlog - Report

The Nigerian National Petroleum Company Limited (NNPC) owes around $3 billion to fuel traders for imported petrol.

This is according to Reuters, quoting three sources, as the tumbling naira currency and rising global fuel prices have increased the effective subsidy it is paying.

The revelation is coming amid emerging queues at petrol stations in Lagos, Abuja and other parts of the country, raising fears of another round of scarcity.

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The payment backlog is a blow to the government’s efforts in Africa’s largest economy to shore up its strained finances by curbing costly energy subsidies, the report said.

“They are paying, but it’s slow,” one of the sources with knowledge of the matter said. Five sources said that NNPC – the country’s main importer of petrol – was taking more than 130 days to make the payments instead of within 90 days.

On his May 29, 2023 inauguration day, President Bola Tinubu announced the removal of subsidy on petrol, a development that immediately led to a spike in the price of the product and spiralling inflation across board.

According to the publication, NNPC, Nigeria’s major petrol importer, still struggles with payment for imported petrol due to the incessant depreciation of the naira and rising global fuel prices.

“They are paying, but it’s slow,” one of the sources told Reuters.

Five sources, the publication said, confirmed NNPC was taking more than 130 days to make the payments instead of within 90 days.

According to Femi Sonoye, NNPC spokesperson, the company was “not aware of any such debt nor any financial issues of such magnitude”.

“Our focus remains on sustaining sufficiency in the supply of petroleum products in Nigeria,” Soneye said.

Also, the sources said NNPC’s suppliers, including international traders like Vitol, Mercuria and Gunvor as well as Nigeria-based trading houses, are still supplying fuel.

On February 29, the federal government said petrol importation into the country had dropped by 50 percent since the removal of the subsidy.

This was disclosed by Mohammed Idris, minister of information and national orientation, who said the reduction in importation was due to the removal of subsidy.

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