NNPC’s debt to international traders for imported petrol has grown to around $6 billion, as reported by BusinessDay. According to Reuters, the state-owned company is experiencing delays in payments, extending beyond the typical 90-day period. This debt includes overdue payments exceeding $4 billion to $5 billion for January imports alone, causing several international petrol suppliers to withdraw from recent tenders.
Traders have tolerated these delays due to the $250,000 monthly compensation per cargo for late payments. However, the delays signal a creeping return of fuel subsidies, which were scrapped in May 2023. These subsidies strain NNPC’s cash flow for imports and affect its contributions to President Bola Tinubu’s government.
At least two suppliers have halted participation in recent tenders after reaching their debt exposure limits to Nigeria, refusing to send more gasoline until they receive payments. Suppliers, including Vitol, Mercuria, Gunvor, and Nigeria-based trading houses, declined to comment or be named due to lack of authorization to speak to the media.
As a result, Nigeria’s tenders to buy petrol in June and July were smaller. In July, NNPC will import about 850,000 tonnes of petrol, down from the usual 1 million tonnes in previous months. This has led to long queues and petrol scarcity in major cities like Lagos and Abuja, according to BusinessDay findings.