Because of the high level of indebtedness of marketers to banks, most of the banks have refused to issue Letters of Credit to them. A competent source at the Petroleum Products Pricing Regulatory Agency, PPPRA, disclosed that “the National Consumption level is predicated at 40 million litres daily and this is shared at ratio 50:50 between NNPC and other petroleum products marketers.
“Against the foregoing, available record shows that at the moment, NNPC is meeting its allocated ratio while other marketers have blatantly refused to contribute a drop of their own quota”.
The Federal Government, in a bid to arrest the situation is now seeking ways and means to pay off about N100 billion accruing from foreign exchange differentials and bank interest charges from fuel imports.
The move followed refusal by banks to extend any further credit to oil marketers until a substantial part of the N264 billion, including the foreign exchange differentials and interest charges have been paid.
The N264 billion is the total invoice so far submitted to government by oil marketers for subsidy reimbursement as at January end. The amount is largely sourced from the banks, a development that worried the Central Bank of Nigeria, CBN, which directed banks to rein in their exposures to the energy sector — oil, gas, and power to avoid another round of distress in the system.
The figure is still rising as government is also meant to reimburse them about N6.5 billion more, representing the N10/litre shortfall suffered by the marketers from existing stock on account of reduction in the pump price for PMS from N97 to N87/litre on January 19.
Stock level so far in all the depots from Calabar, Warri, Lagos and Port Harcourt zones excluding Ejigbo, was put in excess of 6.49billion litres, and will rise more once all the figures have been collated.
The stock mostly belongs to the Nigerian National Petroleum Corporation and Pipelines and Products Marketing Company, NNPC/PPMC — 123,777,613.50 litres; Independents – 459,264,602.50; and Majors – 66,211,473.00.
Against this backdrop, Minister of Finance, Dr. Ngozi Okonjo-Iweala, met with the Central Bank of Nigeria, CBN, and bank chiefs last week in Lagos, to plead with them to continue to support the oil marketers to enable them bring in more products, since the nation’s refineries cannot rise to the challenge of meeting domestic demand.
However, a party to the meeting stated that “the body language of the banks did not show that they wanted to do anything until government acted.”
Accordingly, government is being forced to pay off N100 billion out of the N264 billion owed marketers as quickly as possible to enable them bring in more products, which it promised to offset up till the end of March.
Lagos gets 58 million litres
While waiting for government to begin to offset the outstanding debts, the NNPC has released about 58 million litres to Lagos, to be distributed through the six major marketers, NIPCO and Aiteo.
Confirming the development, Executive Secretary, Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore, told newsmen that government had agreed to pay the N100 billion imeediately.
He also urged banks, “to open letters of credit, LCs, to marketers, while the CBN should also approve our Forms M with dispatch.”
He pleaded with the NNPC to continue to supply the marketers with petrol, pending when they are able to bring in their vessels.
Agreeing, spokesman for the NNPC, Mr. Ohi Alegbe, stated that NNPC would continue to supply these set of marketers until their products came.
Tackling the crisis
Meanwhile, as the scarcity situation worsens in Lagos and Abuja, the Department of Petroleum Resources, DPR, the industry regulator, has threatened to deploy law enforcement agents to petrol stations found to be hoarding fuel across the country and compel them to sell to motorists at the regulated price.
Speaking during a visit to some fuel stations in the Central Business District of the FCT, Director, DPR, Mr. George Osahon, warned that the DPR will not hesitate to sanction any marketer found engaging in sharp practices, especially in the hoarding of the product and in manipulation of prices.
Osahon was also accompanied by the Group Managing Director of the NNPC, Mr. Joseph Dawha, Executive Secretary of the Petroleum Products Pricing and Regulatory Agency, PPPRA, Mr. Farouk Ahmed; and the Managing Director, PPMC, Prince Haruna Momoh.
Continuing, Osahon said: “We are going to make sure that those people who are possibly hoarding fuel, don’t hoard fuel. We will try as much as possible to minimise the number of petrol stations to be shut down. For anybody who hoards, we will get law enforcement agents to go in there and make sure that they are forced to sell and sell at regulated prices, and we are doing that in filling stations across the country to ensure this crisis eases off as soon as possible.”
Similarly, Dawha assured that the fuel scarcity situation will ease by tomorrow, as the corporation is working hard to ensure that the crisis is nipped in the bud, adding that the situation was gradually returning to normal, and hoped that within the next two days, supply will be normalised.
He said the NNPC is working with the PPMC, PPPRA and DPR, to ensure increase in the supply of petrol across the country.
Also speaking, Momoh, lamented the absence of effective pipeline network, due to the continuous vandalism of pipelines across the country, saying it is a major challenge to fuel distribution across the country.
He also assured that supply to fuel situations will normalise over the next few days as, according to him, supply is improving with the arrival of a number of fuel vessels over the weekend, while more are expected to arrive in the next couple of days.
He further stated that the PPMC is expanding its depot across the country, adding will commission two of the depots in a few days’ time.
He said, “Despite the increase in our depots, we have to make sure that our pipelines work. When they work, fuel distribution across the country will be much easier,” and advised Nigerians not to engage in panic buying, as the situation has been brought under control.
Speaking with newsmen earlier, Head, Public Affairs Unit, DPR, Abuja, Mr. Mohammed Saidu, attributed the scarcity recorded in the last one week in Abuja and environs to a three million litre shortfall in product lifting from the Suleja depot.
He said, “When we looked at the trend of lifting at the depot, we knew as a regulator that queues will soon start to surface. We quickly went into action; we drafted a team to go out on the various routes within the FCT and environs.
“The lifting has dropped, because for the past three days, the highest that came out from the Suleja depot is about four million litres of PMS. Sometimes, during scarcity like this, we need about seven million litres to make sure the market is saturated. So clearly, there is a decline in lifting.
SUMMARY OF STOCK TAKING OF PMS AT ALL DEPOTS ON JANUARY 19, 2015
CALABAR ZONE REPORT RECEIVED
CATEGORY PMS QTY. GOV (LTRS)
NNPC/PPMC 6,839,736.00
MAJOR MARKETERS
INDEPENDENT
MARKETERS 112408,933.00
TOTAL 118,948,669.000
WARRI ZONE REPORT RECEIVED
CATEGORY PMS QTY. GOV (LTRS)
NNPC/PPMC –
MAJOR MARKETERS
INDEPENDENT
MARKETERS 50,089,548.00
TOTAL 50,089,548.000
LAGOS ZONE REPORT RECEIVED
CATEGORY PMSQTY.GOV(LTRS)
NNPC/PPMC* 111,295,911.000
MAJOR
MARKETERS 48,109,350.000
INDEPENDENT
MARKETERS 273,322,032.000
total 432,727,293.000
(EXCLUDES EJIGBO DEPOT FIGURES WHICH ARE UNDER COLLATION)
PORT HARCOURT ZONE REPORT RECEIVED
CATEGORY PMSQTY.GOV(LTRS)
NNPC/PPMC 5,641,966.503
MAJOR
MARKETERS 18,102,123.000
INDEPENDENT
MARKETERS 23,744,089.503
TOTAL 47,488,179.006
OVERALL SUMMARY
CATEGORY PMS QTY. GOV (LTRS)
NNPC/PPMC 123,777,613.50
MAJOR
MARKETERS 66,211,473.00
INDEPENDENT
MARKETERS 459,264,602.50
TOTAL 649,253,689.006 Click to signup for FREE news updates, latest information and hottest gists everyday
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There is God o. Petroleum sector wants to strangulate the banking sector because our government missed it somewhere. So the masses have to trek or ride bicycle and use grinding stone. Production -power - fuel- capital + corruption = debt + crisis. Nigeria we hail thee!
ReplyDeleteAnd PDP has the gados to blame APC! Stupid ruling party and it's members.
ReplyDelete