What you need to know about the continuous fuel scarcity

NNPC is trending because they’ve admitted that there will be fuel scarcity for a long time, because they are owing a lot of money, can’t afford to pay suppliers.

Basically, NNPC is broke because they’ve been helping FG to pay themselves, fuel subsidy.

This comes after exclusive reports from Vanguard revealed that suppliers have been reducing the quantity of fuel they supplied to NNPC, for months. Because of debt.

But now, they’ve stopped totally. Until NNPC clears a reasonable amount of the debt. That’s why the fuel scarcity has extended for over two months.

Then, NNPC claimed the scarcity was caused by “logistics” issues.

Recall that, two weeks ago NNPC denied owing suppliers $6.8bn. And labeled it “Obligations”. Which we explained that, they were just being fancy, and however, the obligation becomes a debt when they fail to pay it before a certain period.

Technically, in their defense. We can say that the safe period for their “Obligation” had elapsed and now the “Obligation” is now a fully established “Debt”.

Now, Nigerians are unanimously suggesting they probably want to increase the pump price from 600, that’s why they are being dramatic.
Because NNPC claimed they weren’t owing, claimed they made profits, but have suddenly made u-turn, forcing Nigerians to question everything they’ve said in the past, fanning the allegations of corruption.

Nigerians look to Dangote Refinery as a last resort.

ICYMI: NNPC explained that for the past 8-10 years they have never paid subsidy. That what happens is. – When they import PMS, say at ₦1,200. The government will tell them to sell it at half the price. And sometimes the government will pay them the deficit. Other times, the government doesn’t pay it at all, they’ll have to find a way to cover the “shortfall” (obligations)

On profits, NNPC denied allegations that they are unprofitable. By releasing infographics detailing how they recently became profitable in 2020. And in 2023, they made a profit of ₦3.29trillion. With dividends of ₦2.2trillion.

According to reports, F.G brought back subsidy in August 2023. But owes NNPC $4.9bn (₦7.8tn) in subsidy aka “shortfall” for seven months, dating to July. But the estimated subsidy from August 2023 to December 2024 is ₦19trillion.

Now it gets interesting.

NNPC is reporting that they are making profits. But they’ve not remitted dividends and paid taxes because they’ve been using their revenue to cover subsidy (which F.G is supposed to pay them, but didn’t.)

So, President Tinubu now told them that the money they were supposed to remit to the federation since 2023. They should use it to clear the subsidy debt they (the FG) is owing them.

In summary, NNPC is owing foreign debts of $6.8bn. And this is largely because FG didn’t pay them the “shortfall”. Yet they insist they are not paying subsidy and they are profitable. Which is highly questionable.

If it goes on like this, at the end of the year. NNPC will have ₦0.00 in profit if they are using their own profit to service their debt and FG isn’t injecting any funds. It’s basically like a cycle. Unless they get more loans, which is likely going to be another crude backed loan.

In conclusion, there is a possibility that reports of NNPC not remitting to the national purse, is affirmed. However, this could be subject to perspective.

For instance the “obligation debt”. An obligation is a debt. Just that it can be a favorable debt. Wherein, you are not harrased to pay it. But you must pay it before a certain period. And once it exceeds that period. It becomes a proper debt. That’s why NNPC is not interpreting it as “Debt”. – But it was, apparently

Source: X TrendingEx