In a stunning turn of events, NNPC has given into media pressure and is reportedly considering a hike in the price of petrol, according to reports. The corporation, which had previously denied rumors of an imminent price increase, now appears to be swayed by the media’s persistent claims.
Kwara Express has exclusively obtained an official statement from NNPC Ltd, highlighting the significant financial stress faced by the company due to its debt to petrol suppliers. According to Olufemi Soneye, NNPC’s Chief Corporate Communications Officer, the mounting financial strain poses a significant threat to the sustainability of fuel supply, which may impact the overall energy security of the nation.
In the press release, Soneye affirmed the company’s commitment to fulfilling its obligation as a supplier of last resort in accordance with the Petroleum Industry Act (PIA).
“NNPC Ltd Faces Financial Strain Due to PMS Supply Costs, Impacting Supply Sustainability
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.
In line with the Petroleum Industry Act (PIA), NNPC Ltd. remains dedicated to its role as the supplier of last resort, ensuring national energy security. We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide.
Olufemi Soneye
Chief Corporate Communications Officer
NNPC Ltd.
Abuja
1st September, 2024″.
In a shocking about-face, NNPC Ltd has now confirmed what it had earlier denied—the mounting pressure of debts to petrol suppliers. This confirmation, made just two weeks after a press release had attempted to allay concerns and clarify NNPC Ltd.’s financial position, suggests that the company was not initially transparent with the media and the public.
In the latest statement, Chief Corporate Communications Officer Olufemi Soneye acknowledges the significant financial burden facing the company, describing the oil trading business as one conducted on credit.
PRESS RELEASE
NNPC Ltd is not owing $6.8bn
The attention of the Nigerian National Petroleum Company Limited (NNPC Ltd.) has been drawn to a media report that the company is indebted to international oil traders to the tune of $6.8bn and that it has not remitted revenues to the Federation Account since January, among other allegations.
Consequently, the following clarifications have become necessary:
1. That NNPC Ltd. does not owe the sum of $6.8bn to any international trader(s). In the oil trading business, transactions are carried out on credit, and so it is normal to owe at one point or the other. 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.
2. It is not correct to say that NNPC Ltd. has not remitted any money to the Federation Account since January. NNPC Ltd. and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly. This is in addition to payments of CIT to road contractors under the Road Investment Tax Credit Scheme. In all, NNPC Ltd. is the largest contributor to the tax revenue shared every month at the Federation Account Allocation Committee (FAAC).
3. On the issue of quality/quantity fiscalization of imported petroleum products, NNPC Ltd. has no role whatsoever as it is not a regulator. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which is the relevant regulatory agency in charge of such issues, is an independent body and does not report to the NNPC Ltd.
4. That NNPC Ltd. is not averse to inquiries by the media into issues on and around its operations before dissemination to the public either through the print or electronic channels of communication as the company will, always, gladly take the opportunities to state the facts of the subject matter(s). This is in line with the company’s commitment to the Transparency, Accountability, and Performance Excellence (TAPE) philosophy as emplaced by the Mele Kyari-led management since stepping into the saddle in 2019.
Olufemi Soneye
Chief Corporate Communications Officer
NNPC Ltd.
Abuja
18 August, 2024
