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  • Fuel scarcity ends in few days, says NNPC

    Fuel scarcity ends in few days, says NNPC

    The Nigerian National Petroleum Corporation (NNPC) yesterday assured that ongoing fuel scarcity in the country would be a thing of the past in the next few days.

    Its Chief Executive Officer (Upstream), Bello Rabiu, gave the assurance while briefing State House correspondents at the Presidential Villa, Abuja, while giving an update on the supply and distribution situation of the product.

    Flanked by the Chief Operating Officer (Downstream), Henry Nkem-Obi; Chief Operating Officer (Refineries), Anibo Kragha and Group General Manager (Public Affairs), Garbadeen Mohammed yesterday, Rabiu said  the NNPC will soon flood the market with more petrol than the nation can consume.

    According to him, five vessels were already discharging products in various parts of the country.

    Aside this, he said private importers were also discharging at least 120 million litres of the product to complement NNPC’s imports.

    The only delay now, he said has to do with circulation of the products across the country using trucks as pipelines were still not in good condition.

    He said: “The plan going forward from today, we want to make sure that we give more than what is required in the whole country; the total requirement of the country is just about 1,300 trucks but our plan is to make at least 1,500 available everyday until this thing clears up.

    “So, we want to make sure that we saturate the market in a very short time and I think you can see clearly now that Lagos is almost cleared and Abuja is getting better. Other places will follow.”

    Rabiu said the country was spending about $1.8 billion per quarter to import fuel.

  • NNPC loses N24b to Forcados pipeline vandalism

    NNPC loses N24b to Forcados pipeline vandalism

    The Nigerian National Petroleum Corporation (NNPC) said it recorded  N24.23 billion loss in February, and that gas supply decline of 70million standard cubic feet per day (mmscf/d) to power plants in the same month occurred due to vandalism of the 48-inch Forcados export line.

    The corporation stated this in its February oil and gas report.

    The report showed that the Warri refinery was not in working order in January and February, while Kaduna refinery didn’t produce in February.

    It also noted that gas supply to power stations dropped 70mmscf/d, stating that in January, average gas supply was 734mmscf/d, but dropped to 664mmscf/d. This led to power supply dipping to 3065 megawatts (Mw) in February from 3237Mw recorded in January.

    The report noted that the Corporation’s revenue in February fell to N104.8 billion from N130.86 billion in January. With revenues of N104.8 billion and expenses of N129 billion, it recorded a loss of N24 billion in February.

    “A combination of the pre-existing challenges, especially inadequate foreign exchange for importation of petroleum products, resulted in pulling out of most oil majors from importation business, worsening  the lingering fuel crisis,” it said.

    The Corporation said it was compelled to assume importation of over 90 per cent of the petroleum products without the necessary logistics put in place.

    Also, the recent vandalism of the 48-inch Forcados export line resulted in production shut-in of about 130,000 bopd. This adversely impacted on NNPC’s February 2016 report, leading to a loss of about N20billion of NPDC oil revenue, the report said, adding that repair work is ongoing and is expected to last for about eight weeks.

    “In the short-term, NNPC nationwide petroleum supply and distribution have been ramped up to all states to ensure product availability in the country, while mid and long-term measures, including rehabilitation of oil and gas infrastructure nationwide, as well as Pipelines, Depots, Pump Stations and Refineries, are ongoing.

    The report said the new NNPC leadership is fully committed to ensuring a fit-for-purpose organisation structure which is in tune with NNPC vision and stakeholders expectations.

    The leadership is embarking on restructuring the Corporation into autonomous entities, to ensure clarity of purpose and well-designed and defined roles and responsibilities to support the desired outcome, and  establish the necessary enablers for high performance.”

     

  • NNPC, COAS, DSS get petition on murdered security guard

    NNPC, COAS, DSS get petition on murdered security guard

    The Nigerian National Petroleum Corporation (NNPC), the Chief of Army Staff and the Director-General of the State Security Service (SSS) and  have been petitioned over the killing of a security guard,  in Ogun State on Wednesday.

    A pipeline surveillance outfit, King Young Lion Security, in the petition signed by its Media Director, Mr. Abdul-Kabir Akinpelu, and made available to journalists in Ibadan, the Oyo State capital on Friday, accused some men in military uniform of being responsible for the death of the security guard, Mr. Adura Omoboye

    According to the petition, Omoboye who was a part of the surveillance team assigned to keep watch over the petroleum pipeline at Idi-Mangoro Tent, Sagamu, was gruesomely murdered at about 9 am on that day.

    Calling on the relevant agencies to ensure that the culprits are brought to book to forestall a reoccurrence, Akinpelu described  the killing of the deceased  as unfortunate and uncalled for.

    He said: “The men who were dressed in military uniform and came in a Mitsubishi L300 pick up truck with registration number NA 003 ostensibly came to steal fuel from the pipeline as they bore several empty jerry-cans in their vehicle.”

    He stated further that the  efforts made by the surveillance team to intercept the vandals led to the engagement of the team and this resulted in the death of Omoboye.

    Akinpelu said while all the uniformed men escaped in the confrontation, the team was able to recover items like the Mitsubishi L300 pick up van, three jungle hats, a magazine and a mobile telephone.

    He said: “At this juncture, we call upon the army authority, the directorate of state security service, the Nigerian National Petroleum Corporation as well as all other relevant government agencies to probe this matter to forestall the likelihood of a reoccurrence, since the vandalization of this vital facility has clearly become second nature to some unpatriotic men of the armed and paramilitary forces.”

  • ‘NNPC, subsidiaries must adopt financial controls, transparency’

    ‘NNPC, subsidiaries must adopt financial controls, transparency’

    The Natural Resource Governance Institute (NRGI) has advised the management of the Nigerian National Petroleum Corporation (NNPC) to adopt proper financial controls, transparency measures in all of its subsidiaries, if it intends to be profitable.

    The Institute in a report said despite the current global low oil prices, the Corporation could still net several billions of dollars per year for the nation’s treasury if it follows certain standard operational steps in its reforms.

    It said the government must first put in place a clear, legally enforceable rule that will govern revenues the NNPC can keep, adding that previous efforts at reforming and restructuring the NNPC did not follow this step.

    The NNPC must adopt new financial controls and transparency measures for its subsidiaries. This will apply not only to the Nigerian Petroleum Development Company (NPDC), but equally to the Corporation’s half-dozen oil trading subsidiaries, none of which the Institute disclosed what they earn or how they share earnings.

    The group said there is no public accounting for the money that NNPC’s downstream arm, the Pipelines and Product Marketing Company (PPMC), makes from selling refined products including the billions of dollars in gasoline imported each year through oil-for-product swaps

    In the NRGI report made available to The Nation, the Director, Governance Programmes, Alexandra Gillies said the domestic crude allocation should be eliminated by the government, and agree to a new way of supplying oil to the refineries as part of its efforts to find new ownership and management structures for them. She noted that NNPC could remain the largest or even sole supplier under several different models.

    These include tolling, where the NNPC would grant the refineries operational independence and lease refining capacity from them in exchange for crude; repurchase agreements, where the Corporation would buy crude from its upstream partners on behalf of the refineries; or further inter-company sales, with volumes restricted at the refineries’ actual needs instead of 445,000 barrels per day – an amount she said far exceeded the small volumes (often under 100,000 bpd) they can process.

    She said if the NNPC continues to do oil-for-product swaps; it could simply allocate parts of its regular export sales to those deals.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had announced the unbundling or restructuring of the Corporation into  seven divisions and 30 independent companies with their own managing directors. Gillies agreed it was a step toward turning NNPC into a more appropriately-sized, profit-driven firm, but nevertheless pointed out the proposal did not explain how the new companies would fund their operations or share their earnings with the government.

    She said such a rule was also missing from the current plans to break the long delayed Petroleum Industry Bill (PIB) into smaller pieces for passage, adding drafts of a first, senate-led installment were already making the rounds. However, senate leadership said debate would start soon.

    She noted the new bill envisions an NNPC split into two partially privatized companies: the Nigeria Petroleum Assets Management Company and a national oil company. She said the latest drafts talk variously about these entities retaining unspecified shares of earnings, charging the government ‘management fees,’ receiving federal budget appropriations to cover some un-enumerated costs, and paying dividends to the Federation Account based on policies to be agreed down the road.

  • NLC backs Buhari on 2016 budget

    NLC backs Buhari on 2016 budget

    The Nigeria Labour Congress (NLC) Wednesday threw its weight behind the decision of President Muhammadu Buhari not to sign the 2016 budget until details of the budget are transmitted to him.

    The congress also warned that frequent and constant scarcity of petroleum products will not be acceptable to Labour and other Nigerians because the human and economic costs are unimaginable.

    Speaking at the opening of the Central Working Committee meeting of the Congress in Abuja, President of the congress, Comrade Ayuba Wabba said the President should be given the opportunity of studying the budget passed by the National Assembly before assenting to it.

    He also said the fastest way to lose credibility before the ordinary citizenry is scarcity of petroleum products because the combined effects of scarcity of petroleum products and low power supply create misery for the people as well as have a damning impact  on travel, jobs, productivity and the economy as a whole.

    Comrade Wabba said while the National Assembly deserve commendation for painstakingly going through the budget and exposing the imperfections in it, the right of due diligence which the National Assembly exercised to the hilt and led  to the unearthing of discrepancies in the budget should similarly be extended to Mr. President.

    He said: “In spite of the initial controversy around the national budget, it has been passed by the National Assembly. The National Assembly is deserving of commendation for going through the budget with a tooth brush and for exposing the imperfections in it.

    “President Buhari is equally deserving of commendation not just for the courage in expressing outrage at the criminal padding of the budget by the budget cabal but for having the single-mindedness to deal with this situation.

    “The passage of the budget is expected to open or free up the economy. Our observations will not be complete without commenting on the decision of Mr. President to withhold his assent until the details on the budget are transmitted to him by the National Assembly.

    “First, it is within the province of Mr. President to so do as a matter of personal style or principle. Moreover, we have had a presidential precedent. But beyond all this, it is pertinent to note that, the right of due diligence which the National Assembly exercised to the hilt and led to the unearthing of discrepancies in the budget should similarly be extended to Mr. President. Accordingly, we identify with his position that the details of the budget be first transmitted to him, in spite of the challenges this might present.”

    While expressing concern over the lingering fuel crisis in the country, The NLC President said: “When the first incident of fuel scarcity occurred under this government, we put it to sabotage and urged the government to deal decisively with the saboteurs but with an eye to enhance local production as an enduring solution. When the second incident happened, we similarly reasoned the same way.

    “However, with the latest incident of prolonged scarcity and confession by the Minister of State for Petroleum Resources that scarcity will persist till May as he is not a magician, regular scarcity might as well be a familiar feature, and we would do well to brace ourselves for long spells, except government does the needful.

    “We must however make the point that spells of scarcity will not be acceptable to Labour and other Nigerians because the human and economic costs are unimaginable.

    “While we appreciate government’s effort to make available on an uninterruptible basis, such effort  must be seen to be result-yielding and immediate. Because of the place of petroleum products in the lives of the citizenry, it’s scarcity even for a day generates ripple and crippling effects.

    “We dare say one of the fastest ways for government to lose its credibility before the ordinary citizenry is scarcity of petroleum products because the combined effects of scarcity of petroleum products and low power supply create misery for the people as well as have a damning impact on travel, jobs, productivity and the economy as a whole. We are concerned and we must similarly find a way forward.

    “It is gratifying to note that government has straightened its relationship with the critical stake holders (including IPMAN) which it says will henceforth guarantee regular supply at N86 at NNPC filling stations and N86:50 at non-NNPC filling stations.

    “Without prejudice to the on-going government’s initiative at finding a lasting solution, we believe subsisting fuel scarcity is caused by an interplay of corruption in the system; the existence of a cabal that defies the structural changes at NNPC; national and international politics around production, sale and consumption of oil;  sabotage in the management of the refineries; award of contracts for turnaround maintenance (TAM)  without regard to the companies that built these refineries and smuggling.

    “Also not helpful to the system is the regular friction or power play between lifters or distributors of products such as Major Marketers, Independent Marketers, Association of Tank Farm Owners and others in the chain.

    “It is worth mentioning that government institutions in the sector such DPR and PPPRA which are expected to function independently as well as regulate the system, have either been sidelined, weakened and brought under the control of the Ministry of Petroleum Resources.

    “Accordingly, we call on the government to do the needful by demonstrating the will and capacity to restore sanity, discipline and transparency to the downstream sector of the industry. The statutory roles of these agencies should be restored so they can function properly.

    “Government should also deal summarily with corruption in the sector. It should never allow itself to be blackmailed or cowed into taking decisions that in the long run will not be helpful to the ordinary Nigerian.

    “There are pending cases from subsidy scams inherited from the last administration. They came into limelight following our nation-wide protest against unjustifiable increase in prices of petroleum products of January 2012.  Nigerians are keen to know what has become of the reported criminalities by the high and the mighty”.

    The congress demand the diligent prosecution of all those found wanting in the distribution of fuel products, cold or fresh cases and the constitution of the boards of NNPC and PPPRA, adding that while the board of the PPPRA is supposed to be a 26-man board vested with powers of regulating prices of petroleum products, today, it is a one-man show.

    While commending President Muhammadu Buhari for taking bold measures or decisions aimed at rebuilding the economy, the congress said some of these decisions include re-newing or strengthening relations with nations of worth, signing of bilateral or trilateral agreements, creating a safe haven for investment, fighting corruption, restoring internal security,  tracking and recovering looted funds, resisting pressures to further devalue the Naira and other measures.

    It lamented that in spite of the efforts, the Naira has continued to fall against major currencies, inflation continues to rise, commodity prices mount, while the productive sector has continued to shrink with more loss of jobs and very few employers being able to pay salaries as and when due.

    Emphasizing the seriousness of the current economic situation in the country, Comrade Wabba said Government must consult more widely and come up with an enduring solution to the problem.

    He also lamented the absence of a credible economic team with a coherent policy capable of responding to the present economic challenges. Adding that Labour is serious enough a component of this polity to be considered to be part of this team when government constitutes one.

    He warned government and other employers of labour against nonpayment if salaries pointing out that some state government have refused to pay salaries of workers even after collecting the bail out fund from the federal government.

    He said: “It has been observed that many employers including the public sector, have reneged on their contractual obligation to their workers by virtue of refusing to pay salaries as when due. This has exposed workers and their families to all manner of difficulties and embarrassment. Some states, even after collecting bail-out funds have refused to pay, citing all manner of excuses.

    “Our holy books tell us that a labourer deserves his wages! Violation of this well-known dictum is not only abhorrent and reprehensible; it is criminal and not acceptable to us.

    “Accordingly, we have instructed our unions and councils to furnish us with the details of debtor-employers for the purpose of a sustainable engagement on the streets. We by this statement put our state governments and other MDAs on notice. Except they pay up now, they shall keep a date with us”

    Wabba warned the Kaduna state government against going ahead with its audit of union members and forbidding workers from belonging to unions, adding that the decision of the State Government to unilaterally conduct a membership audit of union members constitutes a gross interference in the internal affairs of the unions and is an illegality.

    He said further that “this government’s latest policy or directive is not only an affront but a direct violation of the fundamental and constitutional rights of workers as enshrined in Section 40 of the 1999 Constitution (as amended); Conventions 87 and 98 of ILO ( ratified by Nigeria); and the Trade Unions (Amendment) Act  which guarantee the right and protection of workers to freely associate, unionise and operate independently of government.

    “We have since gone back to Kaduna to mobilize resistance to this policy via sensitizing more workers and using strategic contacts in government circles. We have done a strong letter to the Governor but which we are yet to release.

    “We also reached out to Femi Falana, SAN, who has given us a draft letter to the governor. Please, note that a legal option avails us an opportunity of instituting multiple suits against the Government of Kaduna State since each union is a legal entity of its own”.

     

  • ‘NNPC’s MD not arrested by EFCC’

    Contrary to reports, the Managing Director, Nigerian National Petroleum Corporation, Retail, Mrs. Esther Nnamdi-Ogbue was not arrested by the Economic and Financial Crimes Commission (EFCC).
    A youth group, Young Professional Alliance for Change which denied reports of her arrest said Mrs. Nnamdi-Ogbue was only invited by the EFCC to clarify certain operational issues which she promptly did and was allowed to return home on the same day.
    The group in a statement by its General Secretary, Mr. Chukwudi Ifediora, described reports of the NNPC’s top executive as a campaign of calumny by some detractors who were envious of the giant strides and achievements of Mrs. Nnamdi-Ogbue while she presided over the affairs of the Petroleum Products and Marketing Company (PPMC).
    It said some mischief makers were uncomfortable with the strides recorded by Mrs. Nnamdi-Ogbue in the NNPC from her days as the General Manager, Board Matters and Management Committee Department (BMMC) in the Corporate Secretariat and Legal Division (CSLD) to the Petroleum Products and Marketing Company, (PPMC) which she headed before her latest promotion.
    ‘’ Without doubt, Mrs. Nnamdi-Ogbue is one of the shining light of the NNPC and she was very conscious of her duties and discharged them creditably. In fact, she was appointed the Managing Director of PPMC based on her pedigree in NNPC.
    ” The truth of the matter is that, she was invited and she naturally honored the invitation since she had nothing to hide. Moreover, she is one of the proponents of change in NNPC and her style of administration is still being spoken of in glowing terms in PPMC till tomorrow, ’’ the group stated.

  • Oil firms to provide forex for petrol importation, says NNPC

    Oil firms to provide forex for petrol importation, says NNPC

    The Nigerian National Petroleum Corporation (NNPC) yesterday said that companies  in the upstream oil and gas sector are to provide foreign exchange for the importation of petrol into the country.

    The Group Executive Director/Chief Operations Officer, Downstream, Mr. Henry Ikem-Obih broke the news after inspecting the sale of fuel at some Abuja petrol stations.

    This is coming as the NNPC announced that Nigeria’s three refineries will begin production this month.

    On measures to tackle the scarcity of foreign exchange for marketers in order to enable them import products considering the recent second quarter allocation given to the oil dealers, Ikem-Obih said: “As you know, forex was one of the prime reasons why we didn’t do well in the first quarter. Most marketers who had allocations could not import because they couldn’t access forex.

    “The minister has worked very closely through his own initiatives with the upstream oil companies. So, we have a number of them onboard with us and they will support the local entities and downstream companies.

    “They will help provide forex for the downstream companies to import and meet their PPPRA allocation. So, through the Central Bank of Nigeria, NNPC will support importation of fuel in the second quarter and the oil companies too will work with us. With this combined efforts, we hope we will be able to meet the import allocation for Q2.”

    Ikem-Obih also noted that Nigeria’s three refineries would begin production this month, adding that they would produce locally refined petrol.

    He said:  “Most of the work being done at the refineries are on site, that is, just getting them ready to start cracking crude so that they too can start contributing to the pool of the amount of fuel we have to distribute across Nigeria. We have to ensure that within the month that we have some local refining contributing to the amount of fuel we have to distribute across the country.

    “The work will be across the three locations and they are all at various stages of start-up. And in terms of moving them to their optimal yield, there is a lot of work going on and we are hoping that within this month of April we will also have locally produced fuel as part of what people are buying at the pumps.”

  • Normalcy will soon return to filling stations – NUPENG

    The National Union of Petroleum and Natural Gas Workers (NUPENG) on Wednesday assured that normalcy would soon return to filling states nationwide if the current tempo of loading at the depots continued till the weekend.

    Alhaji Tokunbo Korodo, the South-West Chairman of the union, gave the assurance in an interview with the News Agency of Nigeria (NAN) in Lagos.

    Korodo said that the NNPC commenced massive pumping of petrol to its depot at Mosinmi early this week and loading of petroleum trucks had started.

    “Going round some depots in Lagos, I observed that loading was going on and more filling stations are selling the product at the control price.

    “Some filling stations that are selling between N130 and N150 will be forced to sell at control price when the market is flooded with petrol.

    “If NNPC can keep the tempo of the loading till weekend, more filling stations will have petrol and the queue of motorists at filling stations will reduce.

    “The corporation should ensure that it keeps on pumping petrol to both major and independent marketers’ depots to reduce the scarcity,” he said.

    The chairman appealed to NNPC management to ensure that it carried along all stakeholders in the oil and gas sector so that the fuel scarcity could end as promised.

    Korodo urged the corporation to maintain the current loading system at depots.

    NAN reports that the Minister of State for Petroleum, Dr Ibe Kachikwu, on March 29, said that the long queues in the petrol stations would disappear by April 7.

    Kachikwu made the statement when he appeared before the Senate Committee on Petroleum (Downstream) over the lingering fuel scarcity in the country.

    He apologised to Nigerians over his statement that the fuel scarcity would linger till May.

     

  • Fuel scarcity: Kachikwu apologises to Nigerians

    Fuel scarcity: Kachikwu apologises to Nigerians

     

    Says “I’m not a magician” comment was exaggerated

    Explains how stoppage of fuel subsidy payment led to scarcity

     

    Minister of state for Petroleum Resources, Mr. Emmanuel Ibe Kachikwu, on Tuesday apologised to Nigerian over the lingering fuel scarcity in the country.

     

    Kachikwu who appeared before the Senate Committee on Petroleum Resources, (Downstream) noted particularly that his comment that he is not a magician to cause fuel queues to disappear overnight was not meant to insult Nigerians.

     

    The “I’m not a magician” comment he insisted, was made jocularly and was never intended to slight Nigerians.

     

    The minister said that he shares the pains Nigerians were going through to get fuel as well as working round the clock to find solution to the problem.

     

    He rejected the call for him to resign over the biting fuel crisis but assured that the fuel queues would disappear within the first two weeks of April, 2016.

     

    “Let me thank the Senate for taking time out from your recess to come to dialogue this issue. It shows the importance you attach to the petroleum industry and the feelings of Nigerians.

     

    “Let me just digress. I share the pains of Nigerians. I feel that pain everyday when I walk the streets. On Easter day I was in Lagos monitoring fuel distribution and the depots, I have given 24 hours attention to the problems.

     

    “I have continued to work with one sole purpose which is that every problem must have a solution and I think that is the reason I was picked.

     

    “I do apologise for the comment that I made jocularly with my friends in the press about being a magician and it offended Nigerians. It was not meant to be, it was a side jocular issue.

     

    “I did go on to explain what needed to be done. I did not know that it would create the kind of hyperbole that it did.

     

    “Let me first admit that I am not a typically experienced politician. I am a technocrat. I come to work.

     

    “Some of the phraseologies that I may use, while being acceptable in the arena in which I play obviously will not be acceptable in the public political arena.

     

    “So if any body’s sensibilities were offended by those, I totally apologise.”

     

    “I share the pains of Nigerians. I feel that pain every day. I worked the streets and those who are following my trajectories since I resumed office would see that even on the Christmas day,  I was at the refineries.

     

    “Like I said on the Easter day, I was in Lagos, monitoring fuel distribution at the depots. I have given 24/7 attention to the problem in this industry which were unbelievable.

    “I have continued to work with one sole purpose in mind, which is that every problem will have a solution.

    “I do apologize if a comment I make jocularly with my friends in the press about being a magician offends some Nigerians, it wasn’t meant to be. It is a side jocular issue and I did go ahead to explain what needed to be done.

    “I didn’t intend to create this kind of hyperbole that it did.  Let me admit that I am not a typically experienced politician. I am a technocrat, I came to work.

    “Some of the phraseologies that I may use while being acceptable in the arena in which I play, obviously will not be acceptable in the public political arena. If anybody’s sensitivities were offended by that, I totally apologise.

    “I am a very humble person even imagining the thought that I dictate to Nigerians. I am not somebody like that.”

    On the reason for the current fuel scarcity he said, “Let me put the reasons for the scarcity in three categories. First, what did I meet? When we came in August, this country had arrears of unpaid subsidy claims that were in excess of N600 billion which were not paid for over a year.

    “So, progressively over a period of eight months, prior to my coming on board, people have been staying away from importation not at a heavy level but by about 10 to 15 percent of allocation were not being met. But there was hope that ultimately, if the subsidy regime continues, they would get paid. So, some people continued to import, but by the time we came in, people had reached a breaking point and most of the companies didn’t have the liquidity even to go to the banks and open letters of credit and that became a major issue, and we succeeded in paying, late October last year, the N500bn subsidy.

    “Some element of the subsidy like the foreign exchange components remained unpaid, which has been carried into this year’s budget. It became clear to me that having regards to the difficulty that we faced in terms of paying for the subsidy,  the country can no longer, quite frankly, afford subsidy payment.

    “We were faced with the challenge of ensuring supply of petroleum products without the need for a subsidy regime. As of January 1 this year, the country is no longer paying subsidy, saving us a cumulative of over N1trillion in a one year period. That was the first major issue.

    “Second major issue was that once the N600bn subsidy money was paid, the ability of marketers to import the product became a challenge because they could not raise letters of credit and up to this point that still remain a major issue.

    “So even if they wanted to import, they needed letters of credit and adequate foreign exchange cover. Some of them were owing arrears of liabilities as a result of commitment I had made on petroleum importation prior.

    “So, whatever money they had was taken by banks to offset certain obligations. Going forward now, they didn’t have money to import fuel again. What that meant was that by late August last year, we moved from the expected obligation of the NNPC to bring in 50 percent of the national consumption of about 45 to 50 million litres per day but we now have to cover a 100 percent platform because nobody was bringing in the product, the consumption was still static and we needed to cover the gap.

    “We took up that challenge without increase in crude allocation, without any excess allocation as it were and we have to work exceedingly hard from August last year to cover the gap but we didn’t cover it 100 percent because we didn’t have the ability to do so. So, the gap we could not cover was responsible for the queues. That was responsible for the 80 percent of the problem.

    “Third issue is that of pipeline vandalism. We met pipelines that were in comatose, for instance Mosimi was not working. This morning, after a three months intensive work with private partners, we just been able for the first time, to recover the Escravos to Warri pipeline and about a month ago,  we recovered the Brass to Port Harcourt pipeline. For the first time, we will be able to pump crude to the refineries without the need to use vessels which are extremely expensive which I stopped as soon as I came. For the first time in six years, we are trying to recover the pipeline.

    “We have 18 depots across the country. 90 percent of them are not in a state of use. They have not been maintained. They have been abandoned for years. Money was needed to work on them. But we have advertised for joint partners to come in and work with us to put in the required facilities to get depots working and get pipeline repaired. But through hard work we have been able to recover some pipeline from Mosimi up to Ilorin but with a few punctured points. The crude pipeline from the South to the North again being recovered. The absence of the pipelines, makes movement of the products from Lagos  taking up to a week.

    “Because the importers are not bringing in the product, the logistics of the NNPC had been expanded, creating great nightmare for us. Not only do we bring in the product but we also lighten it and take it to the storage tanks of the majors and some cases if you notice,  we also are taking intervention trucks and taken products into the stations of this individuals because if they do not sell and the stations are empty,  it is a challenge. NNPC basically over extended itself in terms of what it was set up to do and what it has the capacity to do.

    “Lack of infrastructure too is affecting us because we are moving up to 3,000 trucks round the country everyday this is not the best way to circulate or distribute products in a civilised world but that is the only option that we had. NNPC was losing N40bn every month when we came but this had been reduced to N3bn by December last year. We met a company with a debt profile of N4trn and with that of NPDC which is about N1trn. The access to open up letter of credit continues to be a challenge.”

    On diversion of products by marketers he said, “Marketers are diverting the product, some days we load 300 trucks from Lagos coming to Abuja and one third of that, are dissipated into areas where people could make quick returns and so they won’t get to Abuja. We do not have a computerized system that will enable us to track every truck that is loaded from our depots. We are however working on this; it has not been there for 20 years.

    “We are currently working very collaboratively with the oil majors that is upstream producing companies to see how they can sell us foreign exchange for the naira components they would require for their local operations. When they bring in the foreign exchange, they give us the first call.  We are using that module to cover up the foreign exchange gap. We are also working collaboratively with the CBN within the limits of what it can tolerate to give us a little bit of foreign exchange.

    “Additionally we also brought in the DSDP programme because the number of litres of consumption as a nation was spectacularly false. We were carrying figure of 55 million litres per day that was geared towards creating opportunities for people to make more money during the subsidy regime. We did analysis and we discovered that we were consuming 45 million litres which means that we are saving about 10 million litres per day.
    “April begins the DSDP programme which will save us $1bn a year. This means that the contract upon which we were importing fuel in the past was extremely faulty. Once that begins from April 2, we have commitment of much more arrival of the product. That covers the 60 percent that our crude allocation can deal with. There is still that 40 percent gap which importers had got to bring in. That is being worked on through the collaboration of oil majors and the CBN.

    “We are also setting up, for the first time, strategic reserves for the first time in this country of close to about two million tonnes to provide products always. That would be operational as from May. It would contain between five to seven cargoes of fuel as a reserve. Once we do that we should be away from the incessant fuel crisis that we have.

    “We expect that between now and about the 6th to 7th of April, the fuel queues will disappear, the DSDP will begin and the foreign exchange allocation will see us smoothly through the track.

    “The refineries will be working and the volumes they would be producing will be sent to the strategic reserves to address difficult times. In April we are expected to get to get 150 percent of the volumes that would be needed. A lot of that will go to storage tanks. Hopefully that should sort out the problem.”

  • Buhari approves additional crude oil to end fuel scarcity

    Buhari approves additional crude oil to end fuel scarcity

    The Nigerian National Petroleum Corporation (NNPC) Tuesday said that President Muhammadu Buhari has given approval for the corporation to take additional crude oil volume to guarantee the country’s supply of Premium Motor Spirit (PMS) petrol.

    In a statement titled “NNPC determined to end fuel scarcity,” its  Group General Manager, Group Public Affairs Division, Garba Deen Muhammed, said that  due to the challenges that “major oil marketers face in contributing their supply quota due to constraint in accessing foreign exchange and outstanding subsidy obligations, NNPC is burdened with the obligation to guarantee almost 100% in the national supply, since the domestic crude oil supply (445,000 bbls/d) can only guarantee about 50% of the 45 million litres national requirement for petrol; we have secured presidential approval to take additional crude oil volume to guarantee national supply of petrol.”

    Explaining the causes of the scarcity, the spokesman noted that in continuing with our desire to keep Nigerians abreast of the key actions taken in the downstream petroleum sector, NNPC re-assured Nigerians that it was on top of the petroleum products supply and distribution situation, and it remained committed to eliminating this endemic issue once and for all within the next few days.

    According to the statement, the current administration inherited a huge catalog of issues and problems in the downstream sector not limited to arrears of subsidy payments to Oil Marketers, corruption and inefficiencies in the supply and distribution chain, incessant vandalism of pipelines, refineries poor performance, among others.

    It added that; “A combination of these issues resulted in most oil majors completely pulling out from the importation business and NNPC assuming a near 100% importation obligation without the necessary logistics put in place.

    “In line with the change agenda of this Administration, NNPC Management initiated and made progress on various key solutions to providing a lasting end to these issues.

    “The unpaid arrears arising from the subsidy regime had necessitated most oil marketers to stop all forms of involvement in petroleum products imports. Thankfully, with the firm support of Mr. President and the National Assembly, we greatly reduced this debt burden and since January, 1st 2016 we have been able to eliminate subsidy payments by managing prices at current levels through price modulation. This has resulted to savings of over 100bn Naira monthly for the nation.
    “Nationwide Petroleum supply and distribution have been ramped up to all states to ensure product availability in the country. The current supply to States is in excess of the normal consumption especially in the five major consuming cities.”

    The spokesman said that the corporation has intensified monitoring to ensure full compliance with approved prices.

    Violations of approved prices and hoarding of petroleum products attract the following penalties, he vowed.

    The penalties, according NNPC, include giving out of petroleum products free to the public, sealing off fuel stations found to be hoarding petroleum products and payment of a fine.

    The corporation also vowed to withdraw Marketer’s License, stressing that “Any NNPC, DPR, PPPRA or Government Agent found conniving /wanting will be sanctioned accordingly in line with public service guidelines and procedures.

    “As partners in progress, we encourage the general public to report product hoarders and saboteurs of this Administration’s change efforts as they are wittingly fighting every bold change effort currently being put in place. We encourage everyone to shun panic buying and undue return trips as this attitude emboldens marketers to hoard products.”

    The statement noted that supply constraints due to foreign exchange challenges are being resolved through collaboration with the Central Bank of Nigeria on innovative ways of closing the gaps in accessing foreign exchange. It said that as a result of credible leadership provided by the Minster of State, Petroleum Resources/Group Managing Director, NNPC, Dr. Emmanuel Kachikwu and the major international upstream oil companies have indicated their willingness to support major oil marketing companies with some of the required foreign exchange.

    Continuing, the statement noted that “We are vigorously pursuing an improved model for ‘crude oil for refined product’ exchange (the Direct Sale – Direct Purchase arrangement) which eliminates inefficiencies with an attendant cost saving for the nation of about $1 billion. This will guarantee sustainable product supply to the nation.

    “In the medium term, NNPC is working on sustainable strategies to permanently address the issues and challenges facing the midstream and downstream sectors. The overarching objective is to make Nigeria a net exporter of Petroleum products as was the case in the 1970’s.

    “Our commitment to ramp up our local Refining capacity and availability remains un-waivered with the ongoing rehabilitation works targeted at running all Refineries at a minimum 70% capacity utilization within the next 6 – 8 months. This is in addition to our initiative of increasing the combined capacity of the domestic refineries through co-locating smaller but cost efficient modular refineries within the existing refineries premises within a time frame of 12-24 months.

    “To curb Storage and Logistics challenges, we are working on a joint partnership with technically and financially capable investors to ensure that petroleum products transportation and storage facilities are efficiently operated on an open-access common-carrier user-tariff basis.

    “Some of these Depots will be nominated as strategic reserves while we take possession of a strategic reserve vessel in the next 3 months. Tangible results will be delivered within the next 3 – 6 months.

    “Changes usually take time, effort and a lot of focus. We understand the plight of Nigerians and the impact on the overall economy. We genuinely empathize with the attendant sufferings and wish to reassure that we are focused and committed to bring an end to this situation within the next few days and we kindly call on all Nigerians to partner with us on this journey to allowing the whole process of change come into fruition.”