NNPC’s $6.8bn Debt Admission Raises Alarms Over Financial Integrity

NNPC’s $6.8bn Debt Admission Raises Alarms Over Financial Integrity

Nigerians were recently taken aback when the Nigerian National Petroleum Company Limited (NNPC) publicly admitted to owing a debt it had previously denied, raising concerns about the company’s transparency and accountability. The NNPC, which released its 2023 financial report in the third quarter of 2024, confirmed it owes $6.8 billion to petrol suppliers—a significant reversal after months of denials…….CONTINUE READING 

While it was no surprise that the state-owned oil company was in debt, the shocking admission after repeated rejections has led many to question the integrity of the organization. Reports had already surfaced about the NNPC’s outstanding debt, with The PUNCH in July revealing that the company’s obligations to suppliers had surpassed $6 billion. These debts have contributed to fuel shortages, as the NNPC has struggled to manage the difference between fixed pump prices and rising international fuel costs.

A report from Reuters indicated that the NNPC began facing challenges earlier in the year when unpaid fuel invoices exceeded $3 billion. Some traders halted fuel supply due to the growing debt, leaving the NNPC unable to meet its commitments. Despite repeated denials from NNPC spokesperson Olufemi Soneye, who stated in August that the company did not owe $6.8 billion, the company has now reversed course and admitted to the debt.

In a new statement, the NNPC acknowledged the debt, stating that the financial burden threatens fuel supply sustainability. This admission comes as Nigerians continue to face a persistent fuel crisis that has lingered since July.

The NNPC had also previously denied that it was selling petrol to marketers below cost, only to later admit that the Federal Government subsidized the price. Marketers have recently reported that the price of petrol has risen to N1,117 per litre, but the NNPC has insisted that it has not paid any direct subsidies for the past nine years. Instead, the company has sold fuel at below market prices, creating a financial shortfall that the government covers indirectly.

These revelations have left many Nigerians questioning the NNPC’s honesty and integrity. Some believe the recent admissions are an attempt to justify an upcoming increase in petrol prices, which could rise to N900 per litre. Skeptical of the company’s shifting stance, citizens are asking how they can trust the NNPC after its history of denial.

Public figures have also weighed in, with former Minister of Education Oby Ezekwesili criticizing the NNPC’s lack of transparency. She recalled that during her time in government, she frequently told the NNPC leadership that they could not operate like an independent entity. Ezekwesili emphasized the importance of transparency, which led to the creation of the Nigeria Extractive Industries Transparency Initiative (NEITI) to regulate accountability in the oil and minerals sector.

Adding to concerns about NNPC’s transparency was the recent revelation by Dangote Group President, Aliko Dangote, that the NNPC only holds a 7.2% stake in his refinery, contrary to public belief that the state-owned company had a 20% share. This further fueled suspicions about the opaque nature of NNPC’s operations, as the public demands greater clarity from the nation’s key oil institution.