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HOW NNPC IS CONFRONTING FUEL SCARCITY

HOW NNPC IS CONFRONTING FUEL SCARCITY

By Ifeanyi Ottah
Fuel scarcity, no doubt, has become a perennial problem in  Nigeria. There is no government that has existed in this country Fuel scarcity no doubt, has become a perennial problem in Nigeria. There is no government that has existed in this country without the history of acute fuel scarcity especially during or immediately after a festive period. Many Nigerians have advanced the argument that of all the oil producing countries in the world, Nigeria ranks as one of the few countries that are always experiencing fuel crisis all the time.

However, President Mohammadu Buhari has apologized to Nigerians over the long queues being experienced at petrol stations across the country. The president made the apology while presenting the 2016 budget to a joint session of the National Assembly in Abuja

He said government was making efforts to bring an end to the shortages.“ Government profoundly apologizes to Nigerians for this prolonged hardship and misery.

“It is as a result of market speculators and resistance to change by some stakeholders “Government is working very hard to end these shortages and bring fuel to the pumps all over the country,”

He said the Nigeria National Petroleum Corporation (NNPC) had been directed to explore alternative funding models to enable government honour its obligations in Joint Ventures (JVs) and deep Offshore fields.

The president expressed optimism that the measures could be achieved and would lower the burden that the traditional cash calls had imposed on the budget.

He further said it would reduce the burden on cash flows as well as contribute towards shoring up the country’s national reserves.

He said his administration would not lose focus on the need to restructure the Oil and Gas sector which had been marred by corruption and inefficiency.

According to him, he has directed the Petroleum Products Pricing Regulatory Agency (PPPRA) to adjust its pricing template to reflect competitive and market driven components.

“ We believe this can lower input costs and attain savings that will enable PPPRA to keep the selling price for all marketers of petrol at N87 per litre for now,” he said.

Our correspondent reports that oil-related revenues are expected to contribute N820 billion in the 2016 budget.

Buhari, however, blamed past administration for the current situation in which Nigeria is forced to spend billions of naira annually on alleged subsidies for petroleum products.

He also expressed his huge disappointment with the way Nigeria’s oil industry has been run since he left office as petroleum minister and military head of state, stating that he was convinced that if the development of the country’s domestic refining capacity and petroleum product distribution network had kept pace with national demand, there would not  have been any need for the huge subsidies currently being paid to importers.

Meanwhile, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, has ordered the deployment of NNPC staff to filling stations across the country for effective monitoring of the distribution system.

He gave the order at an emergency meeting with senior staff of the corporation at the NNPC Towers in Abuja on Monday.

Dr. Kachikwu said though there were a number of challenges, it was time for NNPC to rise above the challenges by ensuring that the special intervention supplies are not diverted or hoarded.

“This calls for effective monitoring of the supply system, especially at the end points, to ascertain that what is trucked out from the depots is delivered at the designated fuel stations and dispensed to the public in the most efficient manner. We need you to be out there to help achieve this; we can’t be at ease while Nigerians are going through so much pain to get fuel,” Dr. Kachikwu said.

He challenged staff to volunteer for the monitoring exercise, adding that standing up to provide creative solutions to challenges were what the new NNPC is all about.

The minister urged the staff to work towards achieving zero-queues at their respective stations as soon as possible, adding that they should be ready to make sacrifice for the welfare of other citizens.

Also speaking at the emergency meeting, the Group Executive Director, Commercial & Investment, Dr. Victor Adeniran, called on staff on monitoring duties to work closely with the Rapid Response Team by reporting any situation that needs urgent intervention such as low stock, delayed arrival of trucks or any underhand dealing.

Explaining further, Dr. Adeniran said the Rapid Response Team is made up of PPMC staff and representatives of law enforcement agencies that can adequately handle any challenge, adding that so far, about 200 trucks of the special intervention stock have arrived Abuja.

Nigeria currently has about 977.31 million litres of Premium Motor Spirit (petrol) in its land and marine depots, the National PMS Evacuation Report has stated.

The Nigerian National Petroleum Corporation, NNPC, in the report, stated that 914 truckloads of fuel had been dispatched to petrol stations across the country.

It added that 1,939 trucks, conveying 64.04 million litres of the products, had been evacuated from its coastal depots to inland depots in the country.

Giving a breakdown of its PMS sufficiency, the NNPC report stated that the country had 321.23 million litres of PMS in its land reserves and 656.08 million litres in its marine reserves.

Quoting data received from the Petroleum Products Pricing and Regulatory Agency, the report further stated that 13 vessels were currently discharging or awaiting clearance to discharge a combined quantity of 314.454 million/ litres of PMS.

The report stated that five of the vessels were conveying products belonging to the Pipelines and Products Marketing Company while two of the vessels were discharging product belonging to the NNPC.

Consequently, in the bid to ease the distribution challenge that has led to the resurgence of queues at filling stations across the country, the NNPC says about 18 million litres of Premium Motor Spirit, otherwise known as petrol, is currently being distributed to fuel marketers from its depot at Ore, Ondo State, to ensure adequate supply of petrol to motorists.

Group General Manager of the Corporation’s Public Affairs Division, Mr. Ohi Alegbe, stated this while reacting to media reports that NNPC contractors had suspended importation of products on account of debts owed them by the corporation.

Alegbe maintained that the Corporation has a robust stock of petroleum products that could serve the nation for the next 24 days adding that cargo ships have been scheduled to supply the country with enough products all through the year.

The NNPC spokesman disclosed that already, arrangements have been concluded by the corporation to engage 250 trucks to boost the distribution of fuel to retail outlets across the country.

According to him “Right now, we have 18 million liters of fuel being distributed to fuel marketers from NNPC Ore depot and we are not rationing supply to marketers. Ships are delivering to the various depots to ensure steady supply of petroleum products to the end users”.

He appealed to Major Oil Marketing Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), and the Nigerian Navy, Depot and Petroleum Products Marketers Association (DAPMA) and other stakeholders in the petroleum industry to partner with the NNPC to ensure effective distribution of petroleum products across the country.

“I have always said that the more the merrier and so the NNPC supports the active participation of all stakeholders. However, the challenge of distribution is something that cuts across the industry and so the corporation is soliciting the collaboration of all stakeholders to get products across to the end users because distribution is internal and we must work hand-in-hand to address the situation”. Alegbe averred.

On reports of a drop in the number of ships waiting to discharge petroleum products at the ports from 30 to 16 weekly in the new year, the NNPC spokesman said there was nothing in the development to cause anxiety as the arrival of the ships have been programmed to ensure adequate supply as well as to avoid unnecessary exposure to demurrage, adding that in the past, the corporation was accused of creating a Petroleum Armada when it had many cargo ships waiting to berth.

On allegations that NNPC contractors have suspended importation of petroleum products on account of debts owed them by the corporation, Ohi Alegbe said it was not true.

He explained that the business of fuel importation is credit-driven and that the corporation tries as much as possible to meet its obligation to its contractors to avoid a breach of trust which is the soul of the business.

“It is not true that our contractors have suspended importation of products on account of debts owed them. NNPC is committed to meeting its financial obligations to them. In fact, as at todays arrangement is being made to pay them, and they have assured of their commitment to meet their own side of the product supply contract. So there is no threat whatsoever to the supply side of the business to warrant insinuation of worse times as far as the fuel situation is concerned,” stated.

However, Minister of Information, Lai Mohammed, last week said the fuel queues across the country was Nigerians’ way of paying for the sins of ex-President Goodluck Jonathan’s administration.

He was answering questions from reporters at the end of the Federal Executive Council (FEC) meeting, chaired by President Muhammadu Buhari.

Mohammed spoke in company of Minister of Budget and National Planning, Udoma Udo Udoma and Minister of State for Budget and National Planning, Zainab Ahmed.

The Minister of Information noted that Jonathan’s administration failed to make provision for fuel subsidy from August 2014.

The fuel scarcity, he said, was not from unavailability of the product, but as a result of distribution problem.

He said: “what I will be telling Nigerians is that what we met on ground is such that we are paying for the sins of the last administration. I am being serious. You remember that about two weeks ago, we had to go to the National Assembly for a supplementary budget of N674 billion.

“Of that figure, N522 billion was for arrears of fuel subsidy incurred from August last year. One of the reasons for the fuel scarcity was the inability of the last government to make provision for fuel subsidy.

“We do face some other logistic problems but majorly, we are paying for the sins of the last administration.

As a way forward, he said: “The solution is what you have seen us doing. The first thing we have done is to make sure that unlike before when the marketers used to import the major percentage of the fuel, NNPC is now involved in importation, because some of the marketers had stopped importing for a couple of months. If you see any fuel anywhere today, it is imported by the NNPC.

“We also inherited pipeline vandalism, which has made it impossible for us to transport the fuel. In tanks, today we have 14 days’ reserve and off tank, we have 10 days’ reserve. The issue is not non-availability of the product, it is distribution.

“Because of pipelines that have been vandalized and the gridlock in Lagos, it takes about five days for anybody to take fuel with tanker in Lagos. As at two days ago, this matter has been resolved. The Mosinmi pipeline has been secured and it has improved distribution.”

He also said the minister of Budget and National Planning presented a memo to FEC seeking approval for the 2016 budget, which he said, was approved by FEC.

The Attorney General of the Federation and Minister of Justice, Abubakar Malami, he said, also presented a memo for the review of taxation laws to improve the legal framework and enhance compliance.

Stressing that the taxation memo was also approved by FEC, Mohammed said: “We have noticed some inadequacies in the tax regime and that these inadequacies have been exploited by individuals and corporate organisations to evade tax, which has led to loss of revenue to government. The review aims at plugging these loopholes.”

 

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