Bayo Onanuga, the special adviser on information and strategy to President Bola Tinubu, has raised alarm over the dire financial situation faced by the Nigerian National Petroleum Company (NNPC) Limited. In a candid statement shared on X, Onanuga revealed that the NNPC is struggling under the weight of absorbing the price differential between the landing cost and the pump price of petrol, a situation that could push the company toward insolvency if left unchecked.
On Tuesday, NNPC announced an increase in the price of petrol to N855 per litre, despite the landing cost being around N1,200 per litre. This stark difference highlights the severe financial strain on NNPC, which has been trying to shield Nigerian consumers from the full impact of rising global crude prices and the devaluation of the naira.
Reports have also surfaced indicating that the lingering petrol scarcity across the country is being exacerbated by a $6 billion debt NNPC owes to its suppliers. In a recent statement, NNPC confirmed its indebtedness and acknowledged the financial difficulties stemming from its efforts to maintain a steady supply of Premium Motor Spirit (PMS).
Onanuga emphasized that NNPC’s current predicament is not a result of deception by the government but rather a consequence of the company’s efforts to protect Nigerians from skyrocketing fuel costs. He noted that if the NNPC continues to bear these costs, it could become insolvent, which would have far-reaching implications for the entire economy, including the ability of the federal, state, and local governments to function effectively.
“The NNPC can no longer sustain the price differential on its balance sheet without becoming insolvent,” Onanuga stated. “This situation is untenable, and something must be done to ensure NNPC’s survival, keep the engines of government running, and maintain petrol availability at the pumps.”
He suggested that the completion of the Dangote Refinery and other local refineries, including the government-owned Port Harcourt Refinery, could be the much-needed relief. Once these refineries come fully online, they are expected to reduce the need for costly imports, create well-paying jobs, and bolster the economy on multiple fronts.
Onanuga also dismissed claims that the federal government misled the public regarding the removal of petrol subsidies. He clarified that the government has been consistent with its deregulation policy, which was reflected in the 2023 supplementary budget and the 2024 budget, where no provisions for subsidy payments were made.
“The government has been faithful to its policy of ending fuel subsidies,” Onanuga reiterated. “The NNPC’s debt is a reflection of its commitment to protect Nigerian consumers, even at the risk of its financial health.”
As the situation unfolds, all eyes are on the Dangote Refinery and other local solutions to alleviate the burden on NNPC and prevent a potential economic crisis.
