Economist Johnson Chukwu has raised concerns that Nigerians might not benefit from the Dangote Refinery due to the financial troubles of the Nigerian National Petroleum Company Limited (NNPCL). Chukwu noted that NNPCL’s debt and its inability to cover the costs of Premium Motor Spirit (PMS) could hinder the expected advantages from the new refinery.
In an interview on Arise Television, Chukwu pointed out that while the Dangote Refinery is expected to reduce costs associated with shipping, insurance, and other logistics, the current debt situation of NNPCL could obstruct these benefits. He explained, “NNPCL’s debt of about $6 billion, accrued from importing fuel at a cost higher than the pump price, is a significant issue.”
Chukwu elaborated that NNPCL’s inability to recover costs from fuel sales has led to mounting debt, and many oil companies are hesitant to supply NNPCL due to unpaid debts. He expressed concern that the agreement for NNPCL to purchase products from the Dangote Refinery might exacerbate the problem if NNPCL fails to make payments.
“If NNPCL is unable to generate sufficient revenue from buying refined products from Dangote, it will accumulate further debt,” he said. “Dangote cannot afford to offer unlimited credit to NNPCL without risking financial strain.”
Chukwu suggested that the federal government may need to address this issue either by subsidizing fuel costs from the federation account or by ensuring NNPCL can cover its expenses. Without this support, he warned, the benefits of the Dangote Refinery might not reach Nigerians.
Discussion about this post