The Nigerian National Petroleum Company Limited has begun repaying a substantial $6 billion debt owed to its suppliers.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun made this disclosure during a session with investors in Washington D.C., held on the sidelines of the 2024 annual meetings of the International Monetary Fund and the World Bank.
The development is a key move in response to mounting concerns over the NNPC’s financial health, particularly in light of the company’s ability to maintain the supply of premium motor spirit commonly known as petrol, to the domestic market.
The NNPC had previously confirmed that it owed significant sums to suppliers responsible for delivering PMS.
Edun addressed the broader issue of foreign exchange subsidies during the investor meeting, explaining the nuanced challenge the NNPC faced despite the removal of the petrol subsidy.
“In terms of NNPC and their situation, the reality is that, although the subsidy on May 29, 2023, was removed and was no longer on the balance sheet of the government, it did rear its head, not in terms of petrol subsidy, but foreign exchange subsidy, which was borne elsewhere, and borne mainly by NNPC,” he said.
The Minister expressed confidence in the NNPC’s ability to recover financially, emphasizing that the company has already started taking steps to address its outstanding debts.
“I think what I can say about their own situation is with where they are now, they have a route to paying down their payables and I’m sure that in no time at all, they will start. From what I understand, they have even commenced the process of paying down their payables,” Edun stated.
This repayment initiative comes as Nigeria navigates a delicate economic landscape, striving to stabilize its oil sector while addressing concerns about the sustainability of its energy supply chain amidst foreign exchange pressures.
