The Nigerian National Petroleum Company Limited (NNPCL) has officially commenced the process of settling its $6 billion debt, according to a statement made by Wale Edun, the Minister of Finance and Coordinating Minister for the Economy.

This announcement was made during a meeting with investors in Washington, D.C., on Wednesday, October 23.

Edun addressed concerns about the NNPCL’s financial situation, which had become stressed due to its outstanding obligations to suppliers.

He explained that although the fuel subsidy was removed in May 2023, the company faced financial challenges due to foreign exchange costs.

“The reality is that although the subsidy was removed on May 29, 2023, and is no longer on the government’s balance sheet, it did rear its head—not in terms of petrol subsidy, but foreign exchange subsidy, which was borne elsewhere, mainly by NNPC,” Edun said.

The Minister confirmed that the NNPCL has started working on a clear path to pay off its debts.

“What I can say about their situation now is that they have a route to paying down their payables, and I’m sure that in no time, they will start. From what I understand, they have even commenced the process of paying down their payables,” he added.

NNPCL’s debt to its suppliers has been a growing concern, amounting to over $6 billion, as reported by various sources.

The company has previously admitted to facing financial strain in keeping up with the cost of maintaining supply amidst its mounting debts.

The Nigerian government’s announcement is expected to reassure both domestic and international investors about the company’s financial stability.