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Tag: PPPRA

  • FG to pay subsidy on petrol

    The Federal Government said it would pay subsidy on petrol, otherwise known as Premium Motor Spirit (PMS) from the recoveries made in the first quarter of this year.

    This is contained in the latest Petroleum Product Pricing Regulatory Agency (PPPRA) template released in Abuja on Monday.

    It said between January and March, the federal government was able to save about N10 billion by selling the product above the expected open market price.

    According to the new template, the expected open market price of the PMS has risen to N99.38 per litre for independent and major oil marketers and N98.62 per litre for NNPC retail outlets.

    It added that the expected open market price was the actual price of the product without subsidy and it was based on the current exchange rate of N197 to a dollar.

    It said that at the current price of N86 per litre at NNPC retail outlets, the federal government was paying N12.62 per litre as subsidy on the product and N12.88 per litre as subsidy for other oil marketers’ price of N86.50.

    The News Agency of Nigeria (NAN) reports that a breakdown of the template revealed that for NNPC retail outlets and independent and major oil marketers, the Landing Cost of PMS imported into the country was N84.32 and N85.08 per litre respectively,

    It stated that the distribution margin, which include retailers, transportation, bridging fund and dealers margin among others stood at N14.30 for both the NNPC and other marketers.

  • 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”.

     

  • Kachikwu, PPPRA leadership crisis and fuel scarcity

    In the last 45 days, the Petroleum Products Pricing Regulatory Agency (PPPRA) has been bogged down by a leadership crisis. The tussle is believed to be fuelling the biting petrol scarcity. Stakeholders are worried that if not resolved, it may hamper PPPRA’s role in ensuring smooth operation of the downstream sector. EMEKA UGWUANYI reports. 

    All is not well at the Petroleum Products Pricing Regulatory Agency (PPPRA). A leadership crisis, which is threatening to tear the agency apart, is believed to be partly responsible for the biting fuel scarcity.

    Since February 15, when the Federal Government sacked the heads of parastatals and directed the most senior officers to take charge, all of them complied, except PPPRA which then had two acting Executive Secretaries.

    This made many to question the  government’s sincerity to enforce reforms, PPPRA sources told The Nation.

    The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) wondered why the staff of operating/marketing companies should be drafted as Executive Secretaries of PPPRA, a regulatory agency, when there are competent hands.

    A meeting between PENGASSAN and the Minister of State for Petroleum Resources Dr. Ibe Kachikwu, to resolve the issue ended in what the Union described as “mere promise”.

    The union also approached the National Assembly to protect the PPPRA. It insisted that it was wrong to  appoint staff of operating/marketing companies as Executive Secretaries.

    Earlier, the House of Representatives Committee on Petroleum (Downstream) invited the Secretary to Government of the Federation (SGF), the Acting Executive Secretary and PPPRA Management to appear before it last February 25 and March 22.

    The acting Executive Secretary, Mrs. Sotonye Iyoyo reportedly made efforts to douse the tension over what is hindering the agency’s performance, it was learnt.

    According to PPPRA sources, though Mrs.  Iyoyo is well known in the industry, Kachikwu is reportedly shopping for another acting Executive Secretary within the PPPRA management. This, it was learnt, is an attempt to pre-empt the union against the appointment of marketing companies’ officials.

    What is disturbing is the desperation in naming a Manager on level 14 over about eight level 16 officers without first redeploying or retiring them. This, a source said is in bad taste.

    The source alleged: “The new acting Executive Secretary is a novice in PPPRA’s operations. The aim is deliberate – to allow some faceless external forces to call the shots.The acting Executive Secretary runs a referral style of administration where she consults big wigs in operating companies before taking decisions. It’s unfortunate indeed.

    “Her appointment as the acting Executive Secretary has nailed the PPPRA and made it a lame duck and an appendage of marketing companies. PPPRA is a shadow of itself, from a robust, independent regulatory agency on its creation in 2003 to a rubber stamp organisation.”

    In a March 11 letter, Senate President Bukola Saraki referred the union’s agitation to the Senate Committee on Downstream.The union is hopeful that the National Assembly will end the impunity at PPPRA, which began after the removal of its pioneer Executive Secretary, Dr. Oluwole Oluleye, the sources said. According to the source, the fuel crisis, the lopsided allocation and unlevel operating environment are the antithesis of what the agency was set up to do.

    “The leadership of the PPPRA is a huge joke. The disturbing aspect is that Dr. Kachikwu was hoodwinked into believing that the choice of Mrs. Iyoyo was genuine. It is so glaring that the choice of another acting Executive Secretary buttresses the union’s allegation that there must be something cynical and curious about the manner of her appointment,” the sources added.

    The PENGASSAN-PPPRA branch Chairman and Secretary, Comrades Victor Ononokpono and Ghide Muhammad said the union would reveal the reasons for the haste in the appoinment.

    The union had advised President Muhammadu Buhari on how to appoint an Executive Secretary from a long list of those who understand the industry. The union alleged that there is a clique of  influential officials in the public service that determines who becomes what under Kachikwu’s leadership. They misguide the minister, who may not be in league with their grand plan, it added.

    The source said: “The greatest minus for Moses Mbaba, the most senior official when the presidential directive for CEOs to hand over to the most senior officers in their organisations came is his forthrightness. He is a disciplinarian and an honest public servant. There was the fear of his not willing to be part of a cover-up of so many untoward activities. So, to discredit him, a purported waiver was said to have been obtained to appoint another acting Executive Secretary under the pretext that he was not technical enough.

    “PPPRA is characterised by poor leadership and the lack of operational independence vindicates the Union’s agitation for independence. The PPPRA Board should be immediately constituted. It is unimaginable that petroleum marketers are not able to get foreign exchange (forex) from the Central Bank of Nigeria when the apex bank is on the board of PPPRA.

    ‘’How could distribution of import allocation be lopsided if all the stakeholders represented on the board participate in the process? Who protects the consumer against predatory tendencies of operators?”

  • PPPRA appointment: PENGASSAN may resort to moral suasion

    PPPRA appointment: PENGASSAN may resort to moral suasion

    The Petroleum Products Pricing Regulatory Agency (PPPRA) branch of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) Friday said that it would resort to moral suasion should efforts at engaging the federal government to appoint the agency’s Executive Secretary from the organization fail.

    The Ministry of Petroleum Resources had on February 22 deployed a senior staff from the Nigerian National Petroleum Corporation (NNPC) Stephanie Iyoyo, to act as the Executive Secretary.

    As government relieved the former Executive Secretary, Farouk Ahmed of his job last week, he handed over to the most senior staff (Mr. Moses Mbaba) four days after.

    But confusion ensued in the agency when Iyoyo also assumed the office in the same capacity on Monday leading to the association’s protest.

    Speaking with journalist at Abuja Friday, the branch chairman, Comrade Victor Ononokpono, said “What you are asking me is what is our plan B? We have decided since the national body has taken over the matter, to deploy moral suasion.”

    Earlier, he said that the persistent deployment of NNPC staff to head the agency is a fragrant contravention of a portion of the act, establishing the PPPRA.

    The association raised some question about the propriety of assigning an operator to be a regulator.

    “How do you query your pay master? How do we align with global best practice? How do we promote control and checks in corporate governance?” Ononokpono asked, adding ‘These are the questions the protest seeks answers to.”

    According to him, the union had on Tuesday restricted the protest to the Head-Office, thereby allowing free and seamless flow of supply and distribution of petroleum products while pressing for its demands in a peaceful manner.

    The association called on Nigerians to lend their voices to issue.

  • Kerosene to sell at N83 – PPPRA

    Kerosene to sell at N83 – PPPRA

    The Petroleum Products Pricing Regulatory Agency (PPPRA) has increased the price of Household Kerosene from N50 to N83.

    This is contained in its products pricing template, released on Sunday in Abuja.

    It stated that the N83 per litre price applied only to the Nigerian National Petroleum Corporation (NNPC) outlets.

    The template also showed that at N83, the Federal Government will be making a gain of N10.72 on every litre.

    It further puts the expected open market price, which is the landing cost plus total margins at N72.28 per litre.

    The expected open market price is the prevailing open market rate for the product in Nigeria, after taking certain costs into consideration.

    Giving a breakdown of the price, the PPPRA template put the landing cost of ‎the product at N57.98 per litre, while the total margin due‎ middlemen was put at N14.30.

    The retailers’ margin was put at N5 per litre; transporters at N3.05 per litre while dealers at N1.95 per litre. It further put the bridging fund at N5.85 per litre; marine transport average at N0.15 and Administrative‎ Charges – N0.15.

    It stated that the official ex-depot price, which depot owners would sell to marketers, is N68.70 per litre. The official ex-depot price for collection is N73 per litre, while ex-coastal price is N68.02 per litre.

  • Why we gave NNPC 78% allocation, by PPPRA

    Why we gave NNPC 78% allocation, by PPPRA

    Petroleum Products Pricing Regulatory Agency (PPPRA) Executive Secretary Farouk Ahmed has defended his  agency’s 78 per cent import allocation of 3.1 million metric tonnes of Premium Motor Spirit (PMS) to the Nigeria National Petroleum Corporation (NNPC).

    A statement by the agency’s chief in Abuja yesterday noted that the decision was influenced by the inability of some oil marketers to meet their quota due to difficulty to access foreign exchange.

    He said: “We gave 78 per cent of the import allocation to NNPC because we are sure it can source foreign exchange through crude oil sales to finance its importation. If we go back to recent historic trends, especially in the last six months, you will discover that most marketers had difficulty in raising Letters of Credit due to lack of forex.”

    Dismissing insinuation that the import allocation was skewed to ease out private sector marketers from the business and to engender NNPC monopoly, Ahmed explained that even the foreign exchange requirement for the 22 per cent import allocation to other oil marketers was being covered by the NNPC and the Central Bank to ensure they perform.

    “The idea is to give support to the marketers to enable optimum service delivery, while ensuring stability in the system,” he said.

    On the reported disparity in pump price of fuel across the country, the PPPRA executive secretary said with the massive importation and distribution of petrol by the NNPC, price disparity will soon disappear as supply is intensified to every nook and cranny of the country.

    “This problem is being tackled in two ways. Firstly, with the support of the minister of state for Petroleum Resources, PPPRA and DPR are working to ensure compliance. Secondly, once product is abundantly available, it becomes a straight issue of supply and demand and competition for market share. And that is the idea,” he said.

    Noting that the worst days were over for fuel supply and distribution challenge, the PPPRA boss assured that the days ahead would witness improved sanity in the product distribution.

  • NNPC, others get deadline on queries

    NNPC, others get deadline on queries

    President Muhammadu Buhari has directed all Ministries, Departments  and  Agencies (MDAS) to respond to all outstanding queries within 30 days or face sanctions.

    The development has created anxiety in more than 50 MDAs, including Nigerian National Petroleum Corporation, Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency (PPPRA) – all indicted in the 2012 Auditor-General’s Report.

    The report questioned the deduction of N2,308,749,174,308.54 Excess Crude Oil/PPT/Royalty from oil and gas revenue before the balance was paid into the Federation Account.

    The Office of the Auditor-General was finalising the compilation of 2013 Report.

    Worried by the refusal to answer audit queries , Buhari threatened to wield the big stick.

     He also directed that henceforth, all audit queries must be answered within 24 hours.

    A statement by the Senior Special Assistant on Media and Publicity  to the President, Mallam Garba Shehu, said Buhari was irrevocably committed  to tackling administrative and bureaucratic corruption.

    The statement said: “President Muhammadu Buhari has directed the Auditor-General of the Federation to ensure that all outstanding audit queries are conclusively resolved within 30 days.

    “President Buhari has also ordered that henceforth, all audit queries must be answered within 24 hours.

    “The orders followed the President’s displeasure on hearing that audit queries  remained unanswered for long periods, sometimes running into years, under previous administrations.”

    Shehu said those who violate financial regulations will henceforth pay a heavy price.

    He said: “The era of impunity is gone. The President is taking the war on corruption to the civil service. He is not happy that standard operating procedures and financial regulations  are no longer being observed as they should.

    “President Buhari will ensure that public officials and civil servants in the service of the Federal Government pay a heavy price from now on for violating financial regulations or disregarding audit queries.”

    He added that the President was determined to “put an end to the present situation in which, rather than respond to legitimate audit queries, violators of financial regulations in government resort to threatening, bribing or mounting other forms of social pressure on auditors.

    “On his watch, President Buhari wants to see firm action against those who violate extant financial regulations, not the prevarications and shenanigans that went on in the past in the form of endless probes and public inquiries.”

    Some of those with outstanding queries in 2012 AGF Report are:

    *NNPC -(1) Deduction of N2,308,749,174,308.54 Excess Crude Oil/PPT/Royalty from oil and gas revenue before the balance was paid into the Federation Account.

     (2) Failure to  remit revenue from domestic crude oil sales totaling N936,027,634,479.81 as well as $998,881.77 interest earned on the Joint Venture Cash Calls in 2012

    *DPR——(a)  N377,264, 685, 789.54 questionable deductions  in favour of Department of Petroleum Resources (DPR).

    (b) $706,880,265.22 unpaid by 21 oil companies as royalties on oil.

    *The Federal Inland Revenue Service (FIRS) got N1, 454,035, 989,899.78.

    *PPPRA——Payment of N229,740,438,597.27  as subsidy

    *Office of the AGF———To explain the difference of N41,856,530,921.54 as well as pay back total sum of N1,901,213,713,587.07 into the Federation Account.

    The Nation had exclusively reported some of the outstanding queries from the Auditor-General of the Federation in connection with NNPC and some of its subsidiaries.

    The 2012 Auditor-General of the Federation (AGF)  report questioned the deduction of N2,308,749,174,308.54 Excess Crude Oil/PPT/Royalty  from oil and gas revenue before the balance was paid into the Federation Account.

    The query came on the heels of the inability of the Auditor-General to obtain a legal authority for the creation of the Excess Crude Oil/PPT/ Royalty Account.

    Of the deductions,  N477,448, 498,6 19.22 was drawn in favour of the Nigerian National Petroleum Corporation (NNPC) and N377,264, 685, 789.54  in favour of the Department of Petroleum Resources (DPR). The Federal Inland Revenue Service (FIRS) got N1, 454,035, 989,899.78.

    The report also discovered payment of various sums of interests to the Federal Government’s excess proceeds of PPT/Royalty  Account  accruing  from fixed term deposits that could not be established.

    It was also reported that $219,247,398 .77 was credited to the FGN Excess Proceeds Crude oil sales account and $443,844,581.47 was credited to PPT/Royalty Account as interest on fixed term deposits.

    “In addition, $221,219.79 was credited to the FGN Excess Proceeds of crude oil sales account; $453,803.13 was credited to PPT/Royalty Account as interest on ordinary deposits.

    “However it was noted in the report that ‘the authority for placing the funds’ which yielded the above interests in deposit account was not made available as requested.

    “The banks where the deposits were made, principal sums deposited, tenor and rate were also not made available for audit verification as requested.

    “During the examination of the statements of the Bank for International Settlement Account of FGN Excess Proceeds of PPT/Royalty Account, the AGF also observed that ‘an amount of $500m was debited into the account on the 29th August 2012 and described as interest on fixed term deposit’.

    “The Accountant General of the Federation, in the report, was queried to explain the difference of N41,856,530,921.54 as well as pay back N1,901,213,713,587.07 into the Federation Account, out of which N1,132,619,890,792.96 is for joint venture cash calls (JVCs); N260b is for petroleum subsidy; N477,448,498,619.22 is for excess crude sale and N31,145,324,174.89 under remittance of revenue deducted at source by NNPC from the revenue proceeds in accordance with Section 162(1) of the 1999 Constitution.”

    A Presidency source said: “By this directive, President Muhammadu Buhari is only asserting the  roles of the Auditor-General of the Federation as enshrined in the 1999 Constitution.

    “You can see that we have suffered a systemic collapse over the years. When Buhari said he inherited rot, some Nigerians thought he was crying wolf.  In fact, since 1999,  MDAs have been treating AGF queries with disdain.”

    Section 85 (4-6) of the constitution states: “(4) The Auditor-General shall have power to conduct checks of all government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly.

    “(5) The Auditor-General shall, within 90 days of receipt of the Accountant-General‘s financial statement, submit his reports under this section to each House of the National Assembly and each House shall cause the reports to be considered by a committee of the House of the National Assembly responsible for public accounts.

    “(6) In the exercise of his functions under this Constitution, the Auditor-General shall not be subject to the direction or control of any other authority or person.”

  • Fuel scarcity worsens Lagos traffic

    Fuel scarcity worsens Lagos traffic


  • Naira devaluation caused fuel scarcity, says PPPRA

    Naira devaluation caused fuel scarcity, says PPPRA

    The Petroleum Products Pricing and Regulatory Agency (PPPRA) yesterday claimed that the fuel scarcity being experienced in parts of the country was caused by the two rounds of Naira devaluation carried out by the Central Bank of Nigeria (CBN).

    The PPPRA said the devaluation was carried out by the CBN between November 2014 and last month.

    Executive Secretary of PPPRA, Farouk Ahmed, defending the agency’s 2015 budget before the Senate Committee on Petroleum (Downstream), said the devaluation caused huge confusion in the oil sector as his agency did not know the exchange rate to use for payment on fuel importation.

    He noted that as a result, marketers could not deliver the cargoes of fuel expected from them because they were not sure of the exact delivery cost due to the devaluation.

    He added that as a result of the measure, the old template used for paying the marketers was no longer useful.

    Ahmed explained that the PPPRA sought the CBN’s advice before it could eventually draw up a new template.

    The crisis, he said, had eventually been resolved as the Budget Office on Monday approved payment for outstanding bills that the marketers are being owed.

    He noted that the matter was resolved after a meeting of the Ministry of Finance, the PPPRA and other agencies.

    Ahmed said:  ”The recent events have to do with the delay in the arrival of cargoes. Non-arrival of cargoes made it difficult for petroleum motor spirit (PMS) to be delivered. What actually complicated it was the devaluation of naira – two times. The first one that took place on November 28 devalued Naira from N155 to N168 to $1. The second one that took place on February 18 brought the exchange rate to N199 to $1.

    “These two developments brought a lot of confusion into the oil sector. Marketers were not sure of the actual delivery cost. We had to draw a new template as advised by the CBN. The delay we have now is caused by the November devaluation. But the reality is that the policy is clear now. The Minister of Finance, PPPRA and other agencies are working closely to ensure that outstanding bills are paid. And that one had been done now. Yesterday, (Monday) we got an approval from the Budget Office for payment of all outstanding bills. We have adjusted the template now. We have to put the exchange rate at the interbank rate. Now, we have a direction.”

    The Nigeria National Petroleum Corporation (NNPC) failed to appear before the committee to give its own account on the fuel scarcity.

    The NNPC chiefs’ absence to appear prompted Committee Chairman Senator Magnus Abe to say: “We invited the NNPC to come and defend their budget, they didn’t show up. They don’t even have the respect to give any response to the invitation. We are directing the clerk to re-invite the NNPC, Department of Petroleum Resources (DPR), Pipeline Product and Marketing Company (PPMC) and all refineries.

    “All of them must appear before this committee on Thursday. All of us have our roles in the Constitution. The letter should contain a strong warning that NNPC must never repeat this before the committee.

    “NNPC has never agreed to bring their budget for discussion. This is the same problem we have every year. I’m disappointed that after we agreed on this issue last year, we are still back to it.”

    A member of the committee, Senator Danjuma Goje, said it was ridiculous that the NNPC still had the audacity to ignore the committee’s invitation in spite of  ”this acute shortage we have throughout this country.”

    “ We know that NNPC has been spending money without appropriation. But then, courtesy demands that they honour our invitation. They are doing their work. We are also doing ours. With all the sad story of NNPC, they still have the guts to treat us with disrespect,” Goje said.

  • Naira devaluation caused fuel scarcity – PPPRA

    Naira devaluation caused fuel scarcity – PPPRA

    The Petroleum Products Pricing and Regulatory Agency (PPPRA) on Tuesday claimed that the ongoing fuel scarcity being experienced in parts of the country was caused by the two rounds of naira devaluation carried out by the Central Bank of Nigeria.

    PPPRA said the devaluation was carried out by the CBN between November 2014 and February 2015.

    The Executive Secretary of PPPRA, Farouk Ahmed, stated this while defending his agency’s 2015 budget before the Senate Committee on Petroleum (Downstream).

    Ahmed told the committee that the devaluation caused huge confusion in the oil sector as his agency did not know the exchange rate to be used for payment on fuel importation.

    He noted that as a result, marketers could not deliver the cargoes of fuel expected from them because they were not sure of the exact delivery cost due to the devaluation.

    He added that as a result of the CBN measure, the old template used for paying the marketers was no longer useful.

    Ahmed explained that PPPRA had to seek the advice of the CBN before it could eventually draw up a new template.

    The crisis, he said, had eventually been resolved as the Budget Office on Monday approved payment for outstanding bills owed the marketers.

    He noted that situation was resolved after a meeting of the Ministry of Finance, PPPRA and other relevant agencies.

    He said, “The recent events have to do with delay in the arrival of cargoes. Non-arrival of cargoes made it difficult for Premium Motor Spirit (PMS) to be delivered. What actually complicated it was the devaluation of naira – two times. The first one that took place on November 28, 2014 when Naira was devalued from N155 to N168 to $1. The second one that took place on February 18 brought the exchange rate to N199 to $1.

    “These two developments brought a lot of confusion into the oil sector. Marketers were not sure of the actual delivery cost. We had to draw a new template as advised by the CBN. The delay we have now is caused by the November devaluation. But the reality is that the policy is clear now. The Minister of Finance, PPPRA and other agencies are working closely to ensure that outstanding bills are paid. And that one had been done now. On Monday, we got an approval from the Budget Office for payment of all outstanding bills. We have adjusted the template now. We have to put the exchange rate at the interbank rate. Now, we have a direction.”