Nigeria’s debt to petrol traders surpasses $6bn — Report  

Nigeria’s debt to petrol traders has surpassed $6 billion, doubling since early April, as the state oil firm, Nigerian National Petroleum Corporation (NNPC), struggles to cover the gap between fixed pump prices and international fuel costs, according to six industry sources.

This is according to a report by Reuters on Thursday, which tracks data on international petrol prices.

Sources confirmed to the American media outlet that NNPC has capped the pump prices of petrol shortly after the removal of subsidy in May 29, 2023.

The cap on fuel prices has resulted in stability at the pump despite increases in international crude oil prices and the devaluation of the naira against the dollar.

This situation has led many to speculate that the government might have reinstated some form of petrol subsidy, given the discrepancy between market prices and the steady price of the commodity.

According to data from Reuters, NNPC began facing difficulties early this year when late gasoline payments exceeded $3 billion.

The company has yet to pay for some January imports, with traders stating that the late payments now amount to between $4 billion and $5 billion.

Under the terms of their contracts, NNPC is required to pay within 90 days of delivery.

“The only reason traders are putting up with it is the $250,000 a month (per cargo) for late payment compensation,” one industry source said.

At least two suppliers have already stopped participating in recent tenders after reaching their self-imposed debt exposure limits to Nigeria, the sources said.

This means they will not send more gasoline until they receive payments.

The tension to reconcile the international landing cost of petrol and the fixed price of N617 has deepened the debt of NNPC to the traders, the sources confirmed.