The Nigerian National Petroleum Corporation Limited (NNPCL) has increased the pump price to N855 per litre following reports that the corporation owes $6 billion and is struggling to meet various financial obligations.
On Sunday, NNPCL announced that the financial challenges afflicting the corporation are the reason for the ongoing fuel scarcity.
The corporation attributed this to the disparity between the pump price and the landing cost.
President Bola Ahmed Tinubu had removed subsidies and floated the Nigerian Naira to ensure prices of commodities are determined by market forces.
While foreign investors and multilateral financial institutions like the International Monetary Fund (IMF) have lauded the policy, Nigerians and local experts have challenged its modalities.
Since the policy was announced on Monday, 29 May 2023, the Nigerian economy has not remained the same as the cost of living has skyrocketed while the inflation rate remains elevated at over 30%.
New job creation, on the other hand, has plunged to nearly zero, with household income and savings declining.
In March, the Manufacturing Association of Nigeria (MAN) said about 767 manufacturing companies had shut down operations while 335 experienced distress in 2023.
The association attributed this to economic challenges like high foreign exchange rates that made it impossible to import, rising inflation, and weak demand due to declining consumer spending.
This was evident in the Gross Domestic Product (GDP) report released for the second quarter of 2024.
The manufacturing sector’s contribution to the GDP declined by 20.95% to 12.68%, down from 16.04% recorded in the fourth quarter of 2023.