The Nigerian National Petroleum Company Limited (NNPCL) has admitted to facing significant financial strain, signaling a potential increase in petrol prices. Government officials have hinted that maintaining the current price of ₦617 per liter may no longer be feasible due to the fluctuating exchange rate of the Naira against the dollar.
In recent weeks, long queues have reappeared at filling stations across the country, with petrol prices soaring as high as ₦1,000 per liter in some locations. The situation follows the removal of petrol subsidies by President Bola Ahmed Tinubu last year, which led to a substantial increase in fuel prices.
The Federal Government, which previously denied paying subsidies, acknowledged in June 2024 that it had spent ₦5.4 trillion on subsidies for the year, significantly higher than the previous year’s expenditure. The looming price hike would mark the fourth increase in the past 15 months.
The NNPCL, which has been assuring the public of sufficient fuel reserves, has now admitted to a growing debt to petroleum product suppliers, which has surpassed $6 billion. This debt has doubled since April 2024, putting pressure on the company’s ability to sustain fuel supply.
Experts suggest that the government’s recent statements about halting the sale of fuel below landing costs could lead to further price increases, potentially reaching ₦950 to ₦1,000 per liter. The Major Energy Marketers Association of Nigeria (MEMAN) has revealed that the landing cost of petrol in July 2024 was ₦1,117 per liter.
With Nigeria’s declining crude oil output and limited private importation, the NNPCL remains the primary importer of refined products. Industry experts warn that without selling at economic prices, the financial strain on the NNPCL will continue, leading to ongoing supply disruptions.
