Nigeria’s state-owned oil company, the Nigerian National Petroleum Company Limited (NNPCL), is facing criticism for seeking a fresh $2 billion oil-backed loan while the country grapples with fuel scarcity.

According to a Reuters report, NNPCL aims to secure the loan within two months. Company CEO Mele Kyari downplayed concerns, stating the financing would support broader business activities and not represent a desperate measure.

“We have no problem covering our gasoline payments,” Kyari told Reuters. “This is just money for normal business and not a desperate act.”

Kyari did not disclose the exact amount sought but said the loan would be secured against 30,000-35,000 barrels of crude oil production per day. He also revealed plans to partner with “critical but regular partners” to finalize the deal within the next two months.

This news comes amidst reports of NNPCL’s debt to petrol suppliers doubling to $6 billion in the past four months, a claim the company’s spokesperson refuted.

It’s important to note that NNPCL secured a similar $3.3 billion emergency crude repayment loan in August 2023. This previous loan, arranged by the African Export-Import Bank (Afreximbank), aimed to stabilize the naira and support the government’s economic reforms.

Combining the existing and proposed loans would bring NNPCL’s total crude-for-cash borrowing to a staggering $5.3 billion.

These developments raise concerns, particularly considering the recent struggles of Dangote Refinery, which reportedly faces difficulties acquiring Nigerian crude oil from International Oil Companies (IOCs).

Furthermore, the news coincides with a nationwide fuel shortage that began last week in Abuja and has since spread to major cities like Lagos, Kano, Kaduna, and Katsina, causing hardship for many Nigerians.

Leave a Reply

Your email address will not be published. Required fields are marked *