The pump price of Premium Motor Spirit (PMS), commonly known as petrol, in Nigeria may be on the verge of a significant increase as the Nigerian National Petroleum Company Limited (NNPCL) grapples with financial constraints. The company’s spokesperson, Olufemi Soneye, disclosed on Sunday that NNPCL is facing severe financial strain due to the escalating costs of fuel supply, confirming growing concerns over the country’s prolonged fuel scarcity.
This admission aligns with recent reports that attribute the persistent fuel shortage across Nigeria to the staggering $6.8 billion debt that NNPCL owes to international oil suppliers. As the sole supplier of PMS in Nigeria, NNPCL’s financial struggles suggest that maintaining the current pump prices, which range between N617 and N720 per litre, may no longer be feasible.
In July, the Major Energy Marketers Association of Nigeria (MEMAN) highlighted the severity of the situation, revealing that the landing cost of petrol had surged to N1,117 per litre. Despite NNPCL’s earlier denials of paying fuel subsidies, the company has recently conceded that it is bearing the brunt of the importation shortfalls of PMS, effectively acting as a buffer between the international suppliers and the Nigerian market.
Reacting to this development, MS Ingawa, aide to the Minister of Housing and Urban Development, Ahmed Dangiwa, outlined the limited options available to NNPCL. In a post on his X (formerly Twitter) account on Sunday, Ingawa suggested that NNPCL may have to resort to increasing the pump price of PMS to alleviate the financial burden. He further indicated that even this measure might not generate sufficient funds quickly enough, leaving asset or equity sales as another potential avenue for the company to offset its debts and stabilize the market.
“The only immediate options now are: increase the pump price of PMS to reduce the burden of subsidy on NNPCL. This will not even bring quick and enough money for NNPCL, or raise money through asset or equity sale to offset debt and properly plan,” Ingawa stated.
As the situation continues to unfold, Nigerians are bracing for the potential impact of these financial challenges on the cost of petrol, a critical commodity in the country’s economy. The decisions made by NNPCL in the coming weeks will be pivotal in determining the trajectory of fuel prices and the broader implications for the Nigerian economy.
