NNPC’s $6 billion debt to petrol suppliers not good image for Nigeria: Economist
An Economist, Chijioke Ekechukwu, says the Nigerian National Petroleum Company Limited (NNPC Ltd.) indebtedness to fuel suppliers is not good for the country’s credit rating globally.
The expert said the chaos that the debt may cause could be devastating to Nigeria’s already fragile economy.
Mr Ekechukwu, in an interview with journalists on Sunday in Abuja, said the NNPC Ltd. should not be seen to be defaulting in its obligations to contractors.
The NNPC Ltd. had recently acknowledged that its $6 billion debt to petrol suppliers is a financial strain that has placed considerable pressure on the company and threatens fuel supply sustainability.
Reacting to the development, Mr Ekechukwu said for the credibility and credit rating of Nigeria in the global arena, the NNPC Ltd. should as a matter of urgency and necessity, find means of paying their creditors.
“The chaos that may be caused by NNPC Ltd. continuously owing these suppliers may be very devastating to our already fragile economy and state of affairs.
“It makes a mockery of the so-called profit declared. However, it can still have and still make a profit. Such liabilities should be considered before declaring profit,” he said.
The NNPC Ltd. Retail Management on Tuesday approved an upward review of the pump price of Premium Motor Spirit (PMS) and adjusted it to N897 per litre as against N617 per litre.
The independent marketers are selling between N930 and N1,000.
Speaking on the sudden increase in PMS pump price amidst scarcity of the product, he said the country should be ready for an attendant increase in inflation rate.
“Nigerians are heading toward a more severe economic hardship. We have been trying to curb the continuous uptick in the inflation rate using monetary policy tools that have not succeeded optimally.
“With this current increase in petroleum products, we should get ready for a major hike in prices of goods and services and attendant increase in the inflation rate.
“Hardship will continue to pervade the system, which will have a direct link with a higher criminality rate,” he said.
(NAN)
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