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NNPC unveils strategies to end current fuel scarcity in next few days

By on March 30, 2016

Apparently miffed by the controversy generated by the declaration of the Minister of State for Petroleum, Dr. Ibe Kachikwu, that the current petrol shortages could last up to two months, the Nigerian National Petroleum Corporation (NNPC) has unveiled strategies to end the scarcity within the next few days.

The corporation has also reassured Nigerians that it was on top of the petroleum products supply and distribution situation, and remained committed to eliminating this endemic issue once and for all within the next few days.

NNPC’s Group General Manager in charge of Group Public Affairs Division, Mr. Garba Deen Muhammed, said in a statement last night that in the medium term, the corporation was working on sustainable strategies to permanently address the issues and challenges facing the midstream and downstream sectors.

According to him, the overarching objective is to make Nigeria a net exporter of Petroleum products as was the case in the 1970s.

“Our commitment to ramp up our local refining capacity and availability remains unwaivered with the ongoing rehabilitation works targeted at running all Refineries at a minimum 70 per cent capacity utilisation within the next eight to nine 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,” Muhammed explained.

He further stated that as a result of the challenges that major oil marketers faced in contributing their supply quota due to constraint in accessing foreign exchange and outstanding subsidy obligations, the corporation was burdened with the obligation to guarantee almost 100 per cent in the national supply.

Muhammed noted that since the domestic crude oil supply of 445,000 barrels per day could only guarantee about 50 per cent of the 45 million litres national requirement for petrol, NNPC had secured presidential approval to take additional crude oil volume to guarantee national supply of petrol.

To curb storage and logistics challenges, he said the corporation was working on a joint partnership with technically and financially capable investors to ensure that petroleum products transportation and storage facilities were 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 three months. Tangible results will be delivered within the next three – six 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,” he explained.

Muhammed further explained that 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, and refineries poor performance.

According to him, a combination of these issues resulted in most oil majors completely pulling out from the importation business and NNPC assuming a near 100 per cent importation obligation without the necessary logistics put in place.
He said in line with the change agenda of this administration, NNPC had initiated and made progress on various key solutions to providing a lasting end to most of the issues.

One of the issues that had been successfully addressed, according to him was 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 1, 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 N100billion monthly for the nation,” he added.
He also added that the nationwide petroleum supply and distribution had been ramped up to all states to ensure product availability in the country, stressing that the current supply to states was in excess of the normal consumption especially in the five major consuming cities.

Muhammed also stated that monitoring had been intensified to ensure full compliance with approved prices.
According to the NNPC spokesman, violations of approved prices and hoarding of petroleum products attracted the following penalties:

“Level 1: Giving out of petroleum products free to the public. Level 2: Sealing off fuel stations found to be hoarding petroleum products and payment of a fine. Level 3: Withdrawal of Marketer’s licence,” he explained.
He said any government official found conniving/wanting would be sanctioned accordingly in line with public service guidelines and procedures.

Muhammed also encouraged the general public to report product hoarders and saboteurs of this administration’s change efforts, adding that they are wittingly fighting every bold change effort currently being put in place.
He also charged motorists and other fuel users to shun panic buying and undue return trips, stressing that this attitude emboldens marketers to hoard products.

“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. Similarly, as a result of credible leadership provided by the Minster of State, Petroleum Resources/Group Managing Director, NNPC, the major international upstream oil companies have indicated their willingness to support major oil marketing companies with some of the required foreign exchange. 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,” Muhammed explained.

Meanwhile, disturbed by the protracted fuel scarcity across the country, the Senate Committee on Petroleum (Downstream) yesterday summoned, Kachickwu, to appear before it today and explain why fuel scarcity has continued unabated.

The resolve to summon Kachikwu was the fallout of the committee’s oversight visit to major petrol stations in Abuja metropolis monday.

During the tour, the committee expressed concern over non-availability of petrol in many stations following lack of supply to Abuja from the Suleja depot of the NNPC.

According to the committee’s acting Chairman, Jibrin Barau, summoning Kachikwu had become imminent in view of the grave effects of the scarcity on the masses.

Barau disclosed that on-the-spot-assessment exercise carried out by the committee was spurred by the concern expressed by the Senate President, Bukola Saraki, whom he said asked the committee to intervene and ensure that the crisis was promptly nipped in the bud.

Provoked by the seeming unpromising state of the scarcity, Barau described the situation as unacceptable.
“This situation is very bad and unacceptable; hence, the need for the minister to appear before us tomorrow (today) and unveil his plan on the way out of the chaos to us.

“Even if he doesn’t have any plan yet out of the lingering problem, the Senate President and the entire members of the committee are more than ready to rub minds with him for that needed purpose,” Barau said.

Also speaking on the development, a member of the committee and Senate Minority Whip, Philip Aduda, emphasised the need for the federal government to promptly bail Nigerians out of their current travails.

Aduda said Nigerians were not interested in the current decision of leaders of All Progressives Congress (APC) to engage in name calling over the scarcity, noting that all they care about is the availability of fuel in all parts of the country.

“The government should look for petrol and ensure that it is given to the people. The current situation is unacceptable; we are Nigerians and it will be bad for us to continue remaining in queues.

“If the APC leaders like, let them blame themselves; that is their problem but the most important thing is for us to have fuel in Nigeria. That is what we are looking for and that is what we want. We want to see all these queues disappear,” he stated.

During the tour, independent marketers put the blame at the doorstep of NNPC, pointing out that the corporation had failed to make adequate supply available to petrol stations in all parts of the country.

One of the marketers at Forte Oil, Maitama, for instance, said whereas NNPC used to supply him between five and six tankers of fuel daily, the supply has now been reduced to three tankers daily.

On the other hand, Oando, Wuse Zone Four’s Manager, Isa Friday, said for a long while, he had not received any supply from NNPC depot in Suleja.

 

[ThisDay]