• NNPC moves to tackle scarcity
• Buhari seeks stability of oil prices
• Brent crude trades at $35.10 a barrel
WITH long queues of vehicles at filling stations, Nigerians are again contending with the scarcity of Premium Motor Spirit (PMS), otherwise known as petrol.
Meanwhile, President Muhammadu Buhari has stressed the need for members of the Organisation of Petroleum Exporting Countries (OPEC) and non-members to cooperate and find a common ground to stabilise crude oil prices.
He spoke as brent crude traded at $35.10 a barrel. Pipeline disruption in Nigeria is expected to boost prices of crude oil as it has removed more than 400,000 barrels per day from the market for at least the next two weeks.
When The Guardian visited major roads in Lagos, Ibadan, Abuja, Kaduna and other cities at the weekend, it was discovered that only a few petrol stations were selling the product while the majority were shut down.
As at yesterday evening, the number of filling stations selling fuel had dropped drastically, leaving long queues of customers at the few outlets that were selling above the regulated price of N86.50 per litre.
All the filling stations along Lagos-Ibadan Expressway, Oshodi-Apapa Expressway and Airport Road in Lagos, shut their businesses to customers, claiming to be out of stock.
Major filling stations operated by the Nigerian National Petroleum Corporation (NNPC) on Enugu-Port Harcourt Expressway witnessed long queues as some motorists slept at the filling stations in a desperate bid to buy petrol at the N86.50 per litre.
It was only the NNPC mega station along new Otukpo road in Benue State that had the product which was sold at the regulated price. Others, like Rainoil Oil at the Modern Market Junction, Total filling station located along Kashim Ibrahim road and opposite Federal Road Safety Commission (FRSC) office, were either not selling at all or selling at above the approved price.
Hawkers were taking advantage of the scarcity to sell the product to desperate buyers for as much as N600 to N700 per litre as against the official rate of N86.50k.
Though the NNPC has assured that it was doing everything possible to ensure petrol is available in every part of the country, it was learnt that the current scarcity may not be unconnected with the corporation’s alleged delay in signing an oil swap agreement.
Some refineries were said to have met with NNPC officials in Abuja and London over the past month, promising that they could quickly move vessels with petrol to Nigeria. But negotiations are taking longer than expected, leaving a gap in imports.
NNPC said it opted for “the more efficient Direct Sale-Direct Purchase (DSDP) alternative, which allows for direct sale of crude oil by the corporation as well as direct purchase of petroleum products from credible international refineries.”
The corporation explained that it opted for this position after “evaluation exercise of pre-qualified bidders revealed that most of the 44 companies earlier shortlisted for the next stage of the tender process only had affiliations to refineries abroad, a situation which introduces toll on the value chain.”
The NNPC got approval to import 75 per cent of the country’s petrol needs, while the major and independent marketers got the remaining 25 per cent import permit.
The Guardian learnt that the situation has been made worse by the Central Bank Nigeria (CBN) policy on forex, that allegedly makes it more difficult for them to import the 25 per cent slot. An independent marketer said the group had not been able to import fuel partly due to the inability to source forex. “We depend on NNPC to get product and it is like the corporation is finding it hard to meet the petrol need of the country. We have always said that NNPC alone cannot take full responsibility of fuel import and nobody listened to us. The government needs to encourage others by providing an appropriate policy which will protect us to import,” the marketer said.
NNPC said in a statement that it had deployed additional trucks of petrol to arrest the emerging queues in some fuel stations in the Federal Capital Territory.
In a statement by Group General Manager , Public Affairs Division, Ohi Alegbe, NNPC explained that it had increased the number of fuel trucks to Abuja and environs from the usual average of 160 per day to 250 trucks (8.25 million litres) to arrest the lull experienced due to last weekend’s House of Assembly re-run election in Niger State which affected truck movement from the Suleja depot.
It was learnt that the force majeure declared by the Shell Petroleum Development Company of Nigeria Limited (SPDC) on Forcados oil export following disruption in production caused by the spill on the subsea crude export pipeline is expected to reduce crude oil glut at least in the next two weeks.
The shutdown of Forcados terminal, which is one of Nigeria’s biggest terminals with capacity to export 400,000 barrels a day and pipeline outage in Iraq would definitely help to remove about 800,000 barrels and boost prices in the next few weeks before the repair work is completed, according to an analyst.
President Buhari who spoke at a bilateral meeting with the Sheikh Tamim Bin Hammad Al-Thani, the Emir of the State of Qatar, described the market situation in the industry, which has seen oil prices plummeting by 70 per cent since mid-2014, as “totally unacceptable.’’
Besides, Nigeria and the State of Qatar yesterday in Doha signed a Bilateral Air Services Agreement (BASA) to pave the way for direct flights between major cities of both countries.
On the need for sustained efforts at stabilising oil market, Buhari said: “As members of OPEC and Gas Exporting Countries Forum (GECF), our relations in the areas of oil and gas, which our two nations heavily rely on, need to be enhanced and coordinated for the benefit of our people.
“The current market situation in the oil industry is unsustainable and totally unacceptable. We must cooperate both within and outside our respective organisations to find a common ground to stabilise the market, which will be beneficial to our nations.’’
Buhari who is on the second day of his state visit to Qatar used the occasion of his address to the Emir to commend the existing cordial bilateral relations between both countries and invited prospective Qatari investors to take advantage of the abundant opportunities in Nigeria and invest in the key areas of energy, agriculture, real estate development, banking and finance.
He assured prospective investors of government protection of their persons and investment, noting that in the course of his visit, the delegations from Nigeria and Qatar would formalise at least two bilateral agreements to boost economic cooperation between both countries.
Buhari commended the role Qatar was playing in resolving the Syrian crisis, the Palestinian cause and efforts in reconstructing Gaza.
“The conflicts in Yemen and Syria with their attendant humanitarian crisis need genuine international effort to solve. Nigeria as a peace-loving country identifies with the State of Qatar in all her peace efforts in the world to end terrorist activities.
“Nigeria is a victim of terrorism. It is with heavy heart that I stand before you and say activities of Boko Haram have led to loss of many lives and displacement of innocent people in our dear nation.
“We, however, take pride to inform you that since our coming to power, Boko Haram has been systematically decimated and is in no position to cause serious threat to our development programmes.
“I wish to reiterate that Nigeria rejects violence and extremism in all their ramifications, and assure your Highness that we are with the State of Qatar in your efforts to fight terrorism and injustice in your region and in the world at large,’’ he said.
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