Nigeria Now Importing Petrol ‘On Credit’ – Report

By Tolulope Oke

According to a Bloomberg article, Nigeria’s state-owned oil firm, NNPC, has been obliged to delay payments to some local petrol suppliers by at least three months due to the country’s declining petroleum output.

According to Chief Executive Mele Kyari, the NNPC has requested local importers to enable payment delays of at least 90 days since the country’s oil production has plummeted to a multi-decade low of less than 1.2 million barrels per day.

NNPC data reveals the state spent 2.7 trillion naira ($6.2 billion) on subsidies from January to July to maintain the pump price as one of the lowest in the world

Kyari is optimistic that a rise in oil production in Nigeria will enable the business to meet its delayed payment obligations. By the end of November, according to Kyari, the nation would increase its output by 500,000 barrels per day, mostly as a result of Shell Plc’s Forcados export terminal and Trans-Niger pipeline operations being resumed.

Those acquainted with the arrangements claim that local businesses that accept deferred payments get paid more per ton of gasoline. These new contracts currently involve Sahara, Oando, MRS Oil, and Duke Oil, a NNPC affiliate.

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While the original deals still account for the biggest source of Nigeria’s gasoline, the new contracts represented almost a third of the deliveries in the first seven months of the year. Since December, ad hoc purchases by the state-owned firm have accounted for 13% of total volumes.

NNPC imports about 1.3 million tons of gasoline per month, against which it commits about 320,000 barrels a day of crude to the swaps, according to company data.

The government has blamed the steady decline in crude production since early 2020 on massive levels of theft on the pipelines that crisscross the Niger Delta. That has shut down wells and deterred investment, it says.