Presidential aide Bayo Onanuga has stated that the Nigerian National Petroleum Company Limited (NNPCL) is facing financial constraints because it can no longer afford to subsidize petrol.
Onanuga, who serves as the Special Adviser on Information and Strategy to President Bola Tinubu, made this known in a post on X on Tuesday. He explained that if the NNPCL continues to cover the difference between the landing cost and the retail price of petrol, the company risks going bankrupt.
According to Onanuga, NNPC’s current debt stems from its efforts to shield Nigerian consumers from rising petrol costs, not from any government deception. “NNPC recently raised concerns because it can no longer sustain the price differential on its balance sheet without risking insolvency,” he said.
He highlighted that this situation has broader implications for the functioning of the three tiers of government, as the NNPC has been unable to contribute to the Federation Account, affecting the funds available to the government.
“There are no easy choices. Steps must be taken to ensure NNPC’s survival, maintain government operations, and keep petrol flowing at the pumps,” Onanuga stated.
He suggested that the solution could lie in the Dangote Refinery and other local refineries, which could soon become the primary suppliers of fuel to the domestic market.
“When the Dangote Refinery and other refineries, including the government-owned Port Harcourt Refinery, are fully operational, our country and economy will benefit greatly. These developments will create numerous well-paying jobs along the value chain,” Onanuga noted.
He also pointed out that the demand for foreign exchange to import petroleum products will decrease as local production increases.
Earlier, the NNPCL increased the price of petrol to N855 per litre, but the landing cost of the Premium Motor Spirit (PMS) was around N1,200.