NNPC raises fuel import, as Kaduna, P’Harcourt refineries remain shut
NNPC Refinery
Marketers import product despite subsidy removal
TO close the gap created by the shutdown of Port Harcourt and Kaduna refineries, the Nigerian National Petroleum Corporation (NNPC) has embarked on a massive importation of Premium Motor Spirit (PMS). Also, major and independent petroleum marketers have continued to import PMS into the country despite the absence of subsidy in the 2016 budget.
The refineries were shut owing to crude supply challenges arising from recent attacks on vital oil pipelines. The Kaduna Refinery was already producing 3.2 million litres of petrol as at December last year and would have saved about $5.33 million for the country when it is 90 per cent operational. And the Port Harcourt refinery was recording a daily PMS yield of over 4.1 million litres before the attack on the pipelines.
NNPC has, therefore, been responsible for 78 per cent of the total fuel consumed in the country, while the major and independent marketers fill the remaining 22 per cent approved by the Petroleum Product Pricing and Regulatory Agency (PPPRA).
PPPRA had given NNPC 78 per cent of the allotment to import fuel while the private importers who hitherto shipped in over 60 per cent of the allocation are now left with about 22 per cent of the total allocation.
The fuel imports were approved for all the five major oil marketers and 15 independent marketers. The allocations to five members of Major Oil Marketers Association of Nigeria (MOMAN) were cut by about 70 per cent, while the NNPC allocation was jerked up from 40 to 78 per cent.
Contrary to expectations that the reduction in import allocation to private marketers of petroleum products and the breaches in Bonny-Okrika crude supply line to the Port Harcourt Refinery and the Escravos-Warri crude supply line to the Kaduna Refinery would lead to fuel scarcity in the country, an investigation showed that the product is available all over the country.
The Guardian’s checks revealed the availability of products all over the country though not being sold at the official price of N86.50k per litre as the price is higher in some states than the price approved by the Federal Government. It was learnt that though the Federal Government has approved a new petrol price, the average pump price is still well above N100 per litre.
Apart from Lagos and its environs where the product sells at the official price, a litre of fuel in Akwa Ibom, Imo, Anambra, Zamfara, Yobe, Kwara, Taraba and some other states is still as high as between N120 and N130.
Meanwhile, private petroleum product importers have continued to meet their 22 per cent allocation despite government’s silence on subsidy in 2016. Although they have always complained about the non-payment of subsidy arrears and difficulty in sourcing foreign exchange for fuel importation, an investigation by The Guardian revealed that the marketers have been importing fuel under the current circumstances.
Neither MOMAN nor Independent Petroleum Marketers (IPM) was willing to give reasons for the continued supply of PMS despite the uncertainty surrounding subsidy in 2016. But according to a marketer who spoke with The Guardian in confidence, they have to continue to import to be in business as they are still making profit under the new pricing regime.
According to the source, with the landing cost of PMS put at N59.35 as at February 8, 2016, ex-depot price, N76.50; expected open market price, N73.65 and the regulated price put at N86.50, marketers can survive without subsidy.
“We have made a case to the Federal Government to support IPMAN in mobilising our foreign partners in importing petroleum products at no cost or without subsidies payment to government. We have done all our mathematics that through our new model of crude oil swap arrangement, we can wet the country with petrol and kerosene and still gain from the transactions,” the source said.
The marketer noted that if the government removed the fuel subsidy and regulated the price at which the major oil dealers sold to other independent marketers, this would bring down the price of a litre of PMS.
“The first thing the government should do is to remove the subsidy on fuel, because the so-called subsidy is going into some private pockets. Then, it should regulate the price at which major petroleum dealers should sell the product to other independent marketers,” he said.
The Minister of State for Petroleum, Dr. Ibe Kachikwu, had affirmed government’s resolve to scrap oil subsidy because of an alleged fraud around it.
Kachikwu said the non-payment of subsidy would remain the same, as long as market trends allowed. The price modulation, according to the minister, is not an outright removal of petrol subsidy. He explained that a periodical review of the petroleum pricing template and a flexible management of the pricing system would be considered.
The price modulation, the government stressed, would be predicated on a N97 per litre projection, which would be a cap on the price of fuel with a gradual increase between the band of the current price of N87 and N97 until a fair price was reached in the pricing review.
There has been an argument whether government should continue to subsidise petrol in the country, with the organised labour insisting that government should continue to pay subsidy.
The President of the Trade Union Congress (TUC), Bobboi Kaiýgama, said since the price of crude oil in the international market had dropped drastically, there was the need for government to drastically reduce the price of fuel locally. He advocated a stakeholders’ meeting to discuss the subsidy and why it has become impossible to refine and purchase fuel at N50 per litre.
But the Manufacturers Association of Nigeria (MAN) described fuel subsidy, as a “major source of wastage of foreign exchange”, arguing that it would stop naturally with the privatisation of the oil and gas sector to promote emergence of private refineries.
The president of the association, Dr. Frank Udemba Jacobs, urged the government to revisit the issue of private refineries and carry out investigations into why those granted licences have not started operations.
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20 Comments
“Kaduna, P’Harcourt refineries remain shut” Nigeria system-refineries and functions has remained shut since a confused, unorganized and ill prepared government of Buhari assumed power. All the government has accomplished is disobeying courts orders and killing civilians.
I hope you are not amongst those that support murder of the common people of Nigeria through economic sabotage. There are other and better ways to improve the lives of people in oil producing areas which economic sabotage cannot and will never do.
You are nothing but an annimalasshole, if I have the power to shut down oil production in Niger Delta, I will do it in heartbeat. Yorabad and Foolanis took over 90% of oil block i the region, and kept nothing for the indigenous, and what do you call that. Mr. Fool
I hope you will take the lead to be on location, not hide, or write and stoke evil from safe countries away from the battle zones to leave innocent citizens of Niger Delta bear the unnecessary but equally legal crackdown by the authorities because of actions of the mad and illogical few which you intend to belong. Logically minded supporters and citizens will work towards clean-up of oil pollution and productive used of Government support funds to create oil-based and non-oil based industries such
as fish farming and canning, plastic and aromatic chemical production for people of Niger Delta.
whats logical about lies, extortion, exploitation and domination of oil wealth by parasites of Yorubad and Foolanis, who has wrecked havoc against Niger Delta people. Resisting against injustice comes with a cost, but refusing to resist is even worst. So, expect more oil pipes to be blown apart, and continued deadly ambush against the Nigerian junta forces will continue indefinitely.
Who told you he’s not among? His comment has simply confirmed where he belongs. I won’t be surprised if the vandals were sponsored by the jobless independent oil marketers who used to siphon our resources in the name of subsidy. Instead of protesting, they will even be begging the fed govt to give them more out of the 22 per cent allotted to them and the major marketers. To me, the 22 percent is just to kee kee mind and soul together. It’s as good as ”no business”. No more freebies in the oil and gas sector . At times, i’m amazed the way buhari chairs the affairs of the economy, the man called braindead by some myopic fangs during electioneering campaigns. The govt must have envisaged that there could be shortfall in the pms supply by the refineries so, nnpc took over the major percentage of import so that nobody could wield power unnecessarily anymore. Previously, if the fed gov failed to pay the importers, they would refuse to discharge petrol from their various tank farms but now, even if they protest till next year, it will have little or no effect. God bless nigeria.
Animalasshole, Nigeria is killing citizens because of oil money. Thieves like you have no business in Niger Delta
They were actually functioning until the latest terrorist act of bombing the pipelines supplying them with crude oil. This is terrorism worse than Boko Haram as it affect the entire country. The criminals will receive the justice they deserve
Terrorism is exploitation and environmental denigration of the Niger Delta region.
In light of the money saved by the operation of the refineries. The government should place more focus on securing the pipelines. we are losing over 5 million dollars, which we could probably use to secure our pipeline and ensure that crude oil gets to the refineries. There should be no consideration given to continued subsidy of fuel, the whole sector should be deregulated, which would allow for private investment into refineries.
Just build new efficient refineries. These so called maintenance have not been working. Shame on Nigeria!!!
The issue is the terrorism on Nigerians through the attack on the pipelines thereby shutting off supply to the refineries. There is a conspiracy of silence by the major press not to highlight this terrorism by yet-to-be-identified criminals allegedly associated with Tompolo, which is worse than Boko Haram
What do construed to be terrorism? The worst terrorism has been perpetuated by Yorubad people and Foolanis against IPOB people years. economic exploitation, military blockade, rape and killings against the oil producing states, and looting the wealth of the people, without regards to their environment or economize and social well-being. It will be a long drawn war against perpetrators of evil in our region. Soon Abuja and Lagos will no longer see peace., but violence and turbulence.
Sabotage! Many do not mean well for the country.
Nigeria under the Foolanis and Yorubad does not mean well for others, it is better wasted than letting it serve the interest of a few , who uses it to purchase guns to kill innocent civilians, so anything done to deny them money to purchase killer guns, its worth it.
When ones home is dirty you sweep it clean first before looking looking at another’s.
That is why you are been cleared out of Niger Delta, because you are as dirty as a swine.
Little slave among slaves; stage two shackles.
Animalasshole, a Parasite that can’t sustain itself without harm to the host
Temper temper, One cannot sustain an argument with this cretin. I can see he has anger issues, I think his progeny lost the plot with such a stain to humanity and Niger Delta. What a senseless militant. My brother GEJ would cringe at this fool with one brain cell between his eyes.
We will review and take appropriate action.