(Bloomberg) -- Nigerian National Petroleum Co., the nation’s main importer of fuel, said indebtedness and rising prices are hampering its ability to supply gasoline to Africa’s most-populated nation.
The NNPC’s unpaid dues to traders is prompting suppliers to renege on contracts, local media including Lagos-based newspaper Business Day have reported. Africa’s top crude producer imports most of its fuel requirement because of a lack of domestic refining capacity.
“NNPC has acknowledged recent reports in national newspapers regarding the company’s significant debt to petrol suppliers,” the Abuja-based oil firm said in emailed statement. “This financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.”
Nigerians have had to endure long queues at fuel pumps because of the gasoline shortage. President Bola Tinubu scrapped costly fuel subsidies in May last year, only to reinstate them three months later, leaving the NNPC to absorb the costs. The fuel importer says the government owes the company 7.8 trillion naira ($4.9 billion).
In April, the NNPC said it was “not aware” of about $3 billion of debt that Reuters reported the company owed to fuel traders for imported gasoline.
Read: Nigeria Owes State Oil Firm $4.9 Billion Fuel-Subsidy Debt
Nigeria’s government is betting the start of gasoline production by billionaire Aliko Dangote’s 650,000-barrel-per-day refinery will reduce the need for imports.
“We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide,” the NNPC said.
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