NNPCL Unable to Pay Fuel Suppliers after N3.3trn Profit
NNPC Limited (NNPCL) has acknowledged that its current financial condition poses a threat to the sustainability of fuel supply. There has been a scarcity of fuel in some parts of the country because of the company’s inability to meet supplier payments despite huge profit declared for financial year 2023 operation.
Pump prices have increased significantly across stations in Lagos, Abuja, and other areas. In an official statement, Nigeria’s oil company acknowledged the recent report regarding its significant indebtedness to petrol suppliers in the country. It said the financial strain has placed considerable pressure on the company and poses a threat to its ability to sustainably supply fuel.
“In line with the Petroleum Industry Act (PIA), NNPC Limited remains dedicated to its role as the supplier of last resort ensuring national energy security. We are actively collaborating with relevance agencies and other stakeholders to maintain a consistent supply of petroleum product nationwide”, the oil company said.
Fuel scarcity returned as its fuel suppliers halted supply amidst an unpaid balance. The oil company suppliers include international traders like Gunvor, Vitol, and Mercuria, as well as domestic trading partners.
The Nigerian government has failed to overhaul NNPCL operation despite various allegations against the leadership of the state oil company recently privatised. Despite a huge oil deposit, the country is still importing fuel, using scarce foreign currency.
The balance in Nigeria’s external reserves has not been commensurate with level of oil wealth, Lately, government directed the Central Bank to collect NNPCL revenue as part of efforts to curb company excesses.
Recently, the NNPC Limited released its 2023 Audited Financial Statement, declaring a net profit of N3.297 trillion at the close of the financial year,, which ended in December 2023, an increase of over N700 billion, or 28%, when compared to the 2022 profit of N2.548 trillion.
In a press conference held at the NNPC Towers, its Chief Financial Officer, Mr. Umar Ajiya said the release of the AFS is a testament to the Company’s commitment to transparency and accountability.
“Our fiscal performance reflects both strategic foresight and operational resilience. Despite inherent challenges of our operational and economic environment, we have improved the productivity and the financial performance of this great company,” Ajiya stated.
Ajiya added that posting such impressive returns demonstrates NNPC Ltd’s commitment to sustaining profitability and supporting the attainment of national energy security as stipulated by the Petroleum Industry Act (PIA) 2021, and by extension, as expected by the Company’s shareholders.
Explaining that the NNPC Ltd will announce Initial Public offer (IPO) once the shareholders and Board make a decision, Ajiya also debunked claims on subsidy payment, saying the Company was only taking care of PMS importation shortfall between it and the Federation.
It would be recalled that in 2021, NNPC declared profit in its operations for the first time. From a loss position of N803 billion in 2018, it reduced the loss further down to N1.7 billion in 2019.
However, in 2020, it posted its ‘first ever’ profit of N287 billion, then in 2021, it recorded a N674.1 billion profit and in 2022, the profit grew to N2.548, an unprecedented achievement in its financial performance.
The N3.297 trillion profit declared for 2023 is the highest since the company’s inception, 46 years ago. #NNPCL Unable to Pay Fuel Suppliers after N3.3trn Profit Jaiz Bank Trades at 44% Discount to 52-Week High
