NNPCL’s Fuel Supply Announcement: Experts Suggest It’s a Prelude to Price Increase
Abuja, Nigeria – The recent admission by the Nigerian National Petroleum Corporation Limited (NNPCL) about its financial strain and inability to sustain fuel supply has sparked speculation among industry experts that this may be part of a broader government strategy to justify a hike in petrol prices.
On Sunday, NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, acknowledged the company’s significant debt to fuel suppliers but refrained from disclosing the exact amount. This admission comes at a time when the government and energy experts have been discussing the potential need to adjust petrol prices to reflect the true landing costs.
Experts believe this announcement could be a calculated move by the government to prepare the public for a significant increase in petrol prices, potentially reaching ₦950 to ₦1,000 per liter. The narrative of increasing prices has reportedly been pushed by government officials over the past few weeks.
Minister of State for Petroleum, Heineken Lokpobiri, recently emphasized the need for NNPCL to cease selling fuel below the landing cost, which he argued contributes to smuggling to neighboring countries. The Major Energy Marketers Association of Nigeria (MEMAN) had earlier disclosed that the landing cost of petrol in July 2024 was ₦1,117 per liter, a figure that underscores the financial challenges faced by NNPCL in maintaining the current pump prices.
Industry insiders, including a former chairman of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Akin Akinade, and the CEO of 11 Plc, Tunji Oyebanji, have voiced concerns about the sustainability of selling fuel below cost. They argue that the current situation, where NNPCL remains the primary importer with limited private sector participation, is unsustainable, especially given Nigeria’s declining crude oil output.
Akinade pointed out that independent marketers are forced to buy fuel at high prices from third-party depots, leading to increased transportation costs and, ultimately, higher pump prices. Oyebanji echoed these sentiments, stating that selling fuel below economic prices is unsustainable and could lead to continuous supply disruptions if not addressed.
As the NNPCL and the government continue to navigate these challenges, Nigerians are bracing for the possibility of higher fuel prices in the coming months.