…As NNPC Insists that Fuel Price Remains at N145 per Litre
[dropcap]T[/dropcap]he Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Maikanti Baru said 4501 petrol trucks were simply untraceable, vanishing from the Nigerian radar, during the biting fuel supply crisis.
“Due to massive diversion, hoarding, panic buying and smuggling, coupled with the information that three Direct Sales Direct Purchase Consortia had rejected October cargoes, there was insinuation of a supply gap,” he said Thursday at an investigative public hearing by a Joint Senate and House of Representatives Committees on Petroleum Downstream, at the National Assembly Complex, Abuja.
Baru disclosed that during the period, NNPC could not track the movement of 4,501 trucks representing the quantity of the disappeared products.
According to him, the nation lost about 148,533,000 million litres of fuel to the suspected diversion during the December fuel crisis.
The NNPC GMD listed some of the key factors which were responsible for the crisis to include insufficient reserve, clearance speed, supply gap, diversion, hoarding, panic buying and smuggling.
He noted that prior to the crises, NNPC had 1.9 billion litres strategic reserve of Premium Motor Spirit (PMS), which would have lasted for 53 days but that due to panic buying, diversion and hoarding, the Corporation was unable to cope with the daily nation consumption of 37 million litres of PMS, which led to the presence of long queues at petrol stations across the country.
He however said that NNPC took some urgent steps to resolve the scarcity which included but not limited to the immediate activation of war room, additional imports to increase days sufficiency, 24-hour operations in all NNPC Depots and mega stations; sustained media and stakeholders engagements; increased monitoring, surveillance and sanctions as well as production at Kaduna and Port Harcourt refineries put at 3 million daily.
Baru also used the opportunity to call on the Petroleum Products Pricing Regulatory Agency (PPPRA) to review the pricing template and landing cost.
He also asked the National Assembly to approve outstanding subsidy payments and debts to marketers.
In a related development the Minister of State for Petroleum, Dr Emmanuel Ibe Kachikwu, has denied news reports that the Federal Government was planning to jack up the pump price of petrol, at present fixed at N145 per litre.
Idang Alibi, the Director of Press in the ministry in a statement on Thursday night, clarified the minister’s submission made to the joint committee of the National Assembly on Petroleum Downstream.
“The Ministry of Petroleum Resources would like to categorically state that the Honourable Minister never mentioned nor insinuated the need or plans by the Federal Government to increase the current pump price of Premium Motor Spirit (PMS)”, Alibi said.
Alibi restated what Kachikwu told the hearing, shown live on NTA that the Presidency has set up a special committee to identify the immediate and remote causes of the fuel scarcity with a view to finding both immediate and long lasting solutions to the challenge.
“The Committee has been in rounds of deliberations in the past few days and these discussions are still ongoing. The final decisions and recommendations from the Committee would be passed on to the President and Commander-In-Chief for approval”, said Alibi.
Alibi urged the public and indeed stakeholders in the Oil and Gas sector to disregard any such report of a price increase.
Kachikwu told the public hearing at the National Assembly on Thursday that the Nigerian National Petroleum Corporation, NNPC had incurred a cumulative loss of N85.5 billion in importing petrol and selling at the current retail price of N145 per litre, since October 2017.
Kachikwu said the price was fixed in the first quarter of 2016, when crude oil was selling for $49 and expressed fears that with crude price rising to $67 a barrel, the pump price, may no longer be sustainable.
According to him, the landing cost of PMS which was N133.28 per litre in 2016, is now N171 per litre and this has resulted into stoppage of importation of the product by independent marketers.
This, he said had made the Nigeria National Petroleum Corporation ( NNPC ) to be the 100 per cent importer of the product.
The minister disclosed further that as a result of the N26 difference per litre between the current landing cost of the product ( N171) and pump price of N145, NNPC which had been singularly importing the product at the volume of 25million litres per day since October last year, has been incurring a daily loss of about N800-N900million, cumulatively reaching N85.5billion today, in just three months.
According to him, government has mandated him and a committee set up, to find ways out of the problem until the local refineries became functional in 18 months time.
He said three solutions are being considered.
” One , is for the Central bank of Nigeria ( CBN) to allow the marketers access forex at the rate of N204 to a dollar as against the official rate of N305 to keep the pump price of fuel per litre at N145.
” Two , to give room for modulated deregulation where NNPC would be allowed to continue selling at N145 per litre in all its mega stations across the country while the independent marketers should be allowed to sell at whatever price is profitable to them in all their outlets.
” Three, to look at the direction of blanket subsidy for all the importers in bridging the gap which would be like going back to a problem that had earlier been solved “, he said .
He, however, stressed that the final solution to the problem was for the nation to put her refineries in good shape in a way that 80 per cent of local consumption of the product should be provided for locally.
