The Nigerian National Petroleum Company Limited (NNPCL) has revealed that the Nigerian government owes it a staggering N7.8 trillion ($4.9 billion) in petrol subsidy debts from January to July 2024.
This debt is almost half of the N19.4 trillion the government aims to collect in revenue this year.
NNPCL’s Chief Financial Officer, Umar Ajiya, disclosed this figure after the company announced its 2023 audited financial statements.
The government plans to offset N2.2 trillion of this debt against what NNPCL owes the state.
The subsidy, which was withdrawn in May 2023 to help repair the state’s finances, was reintroduced in August to cushion Nigerians from spiraling inflation at 33%.
However, the government maintains that it has scrapped subsidies, with NNPCL claiming it is only bearing the “shortfall” in petrol importation costs.
Despite the denial, a litre of petrol sells for about N617 at NNPC retail stations in Abuja, compared to over N1,000 in other locations, fueling cross-border smuggling.
The state oil company recorded an annual profit of N3.3 trillion in 2023 and plans to invest $6.6 billion in its operations this year.