The Nigerian National Petroleum Corporation (NNPC) was unable to meet its debt obligations as due in January, as a result of inadequate finances, documents seen by PREMIUM TIMES have shown.
The national oil company was also encumbered by huge outstanding Federation Accounts Allocation Committee (FAAC) remittances and other financial obligations which impeded its operations and financial stability. Documents seen show that at the height of the nationwide fuel crisis between December 2017 and January 2018, the NNPC could not import petroleum products because of lack of funds.
The documents detail the challenges the NNPC faced early this year, and include an exchange between President Muhammadu Buhari and the the Group Managing Director of the NNPC, Maikanti Baru, in which he expressed frustration with the growing fuel consumption level in the country. He said if the scarcity went unaddressed, it could lead to social unrest, and made a case for flush funds to address the shortage.
In an apparent response to suggestions raised by the president in a previous communication, Mr Baru claimed that by the status of the NNPC’s balance sheet and its free cash position, the corporation would not be able to use its funds to import petrol. He also suggested the NNPC be allowed access to foreign exchange at the appropriate rate corresponding to supply of petrol, to ensure stability in price, adding that the corporation did not have the cash flow to finance petrol importation that would meet immediate requirement of flush volumes and strategic reserve replenishment.
Source: Premium Times