NNPC Limited (NNPCL) has admitted that its current financial situation jeopardizes the sustainability of fuel delivery. Fuel scarcity has occurred in some sections of the country as a result of the company’s inability to satisfy supplier payments, despite a large profit announced for fiscal year 2023 operations.
Pump prices have risen dramatically at stations in Lagos, Abuja, and other places. In an official statement, Nigeria’s oil firm recognized a recent claim about its substantial debt to domestic petrol suppliers. It stated that the financial hardship has put significant pressure on the corporation and jeopardizes its capacity to supply fuel sustainably.
“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 reappeared after fuel suppliers ceased supply due to an outstanding balance. The oil company’s suppliers include both foreign merchants such as Gunvor, Vitol, and Mercuria and domestic trading partners.
Despite several complaints against the leadership of the freshly privatised state oil corporation, the Nigerian government has failed to alter NNPCL operations. Despite having a large oil deposit, the government continues to import petroleum, depleting its foreign currency.
Nigeria’s overseas reserves have not been in line with the level of oil income. Recently, the government authorized the Central Bank to collect NNPCL revenue as part of attempts to reduce business abuses.
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.
