NNPCL Seeks $2 Billion Oil-Backed Loan Amid Fuel Shortage

 

The Nigerian National Petroleum Company Limited (NNPCL) is pursuing a new $2 billion oil-backed prepayment loan as the country faces widespread fuel scarcity. According to a Reuters report on Tuesday, NNPCL aims to finalize the deal within two months.

Group Chief Executive Officer Mele Kyari stated that the financing would support business investments. “We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.

Kyari indicated that the company plans to secure the loan against 30,000-35,000 barrels per day of crude production but did not disclose the exact amount sought. “It will be a syndication with critical but regular partners who have been in business with our company to forward the cash,” he added, expecting to conclude the deal in the next two months.

This move follows reports that NNPCL’s debts to petrol suppliers have doubled to $6 billion over the past four months. However, NNPCL spokesperson Olufemi Soneye dismissed these claims.

Previously, on August 16, 2023, NNPCL secured a $3.3 billion emergency crude repayment loan arranged by the African Export-Import Bank (Afreximbank). This loan aimed to support the naira and stabilize the foreign exchange market while backing the federal government’s monetary and fiscal reforms.

With the existing $3.3 billion loan and the new $2 billion loan, NNPCL’s crude-for-cash loans would total $5.3 billion.

This development coincides with concerns from Dangote Refinery regarding difficulties in obtaining Nigerian crude from International Oil Companies. Meanwhile, fuel scarcity, which began last week in Abuja, Nasarawa, and Lagos, has now spread to Kano, Kaduna, Katsina, and other states, causing significant distress among Nigerians.

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