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NNPC Begins Repayment of $6 Billion Debt to Suppliers

Published by Tope Fakinlede on October 25th, 2024.

NNPC Begins Repayment of $6 Billion Debt to Suppliers

The Nigerian National Petroleum Company Limited (NNPCL) has officially initiated the repayment of its $6 billion debt to suppliers, as confirmed by Finance Minister Wale Edun.

During a recent meeting with investors in Washington, D.C., Edun addressed concerns surrounding NNPCL’s financial health, which has been strained due to unpaid obligations to its suppliers. He noted that despite the removal of the fuel subsidy in May 2023, the company still faces challenges related to foreign exchange costs.

“While the subsidy was lifted on May 29, 2023, and is no longer reflected on the government’s balance sheet, the impact persists—not in terms of petrol subsidies but as a foreign exchange burden primarily shouldered by NNPCL,” Edun explained.

Edun expressed confidence in the company’s path forward, stating, “Given their current circumstances, they have a clear strategy for reducing their liabilities, and I believe they will start this process soon. From what I understand, they have already begun addressing their payables.”

Last month, NNPCL acknowledged its $6 billion debt owed to suppliers of premium motor spirit (PMS), commonly referred to as petrol. Olufemi Soneye, the chief corporate communications officer, highlighted that the financial pressures stemming from petrol supply costs have significantly impacted the company’s capacity to maintain PMS availability.