NNPC Seeks Crude-Oil Backed Loan as Fuel Scarcity Lingers
The Nigerian National Petroleum Company (NNPC) Limited is seeking to secure another oil-backed loan, less than a year after receiving a $3 billion crude oil repayment loan from Cairo-based Afrexim Bank.
According to Reuters, the new loan will be used to finance the company’s operations and new investments.
Mele Kyari, Group Chief Executive Officer of NNPC, said the loan would be secured using 30,000-35,000 barrels per day of crude production.
“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.
He added, “It will be a syndication with critical but regular partners who have been in business with our company to forward the cash.”
The new crude oil loan, which is estimated to be worth $2 billion, is being sought despite Nigeria’s gasoline debt doubling to $6 billion within the last four months.
Also Read: NNPC Declares State of Emergency on Crude Oil Production, Targets 2 Million Barrels Per Day
NNPC Seeks New Crude Oil Loan Amid Fuel Scarcity
The $3 billion crude oil-backed loan secured in April of last year was used to support government reforms to stabilize the exchange rate after President Bola Tinubu’s monetary reform saw the naira battered. However, despite this loan, the naira, which was traded around N700 to the dollar in April 2023, has further depreciated and now trades at N1500/$.
Also, the request for the new loan is coming at a time when Nigeria is experiencing fuel scarcity.
In Lagos, Nigeria’s economic capital, petrol scarcity has lingered for two days as queue returned to various outlets in the state. Neusroom can also confirm that independent petrol stations in Lagos has increased their prices from N615 to around N650 as demand for the product continues to grow.
