• Alleges $1.1tr fuel diverted through 18 unregistered firms
• NNPC denies non-allocation of product to marketers
• Govt pays self N1.4 billion subsidy daily
• Experts weigh in on downstream sector challenges
The Peoples Democratic Party (PDP) has accused the Federal Government of covering up "huge sleazes directly involving the All Progressives Congress (APC) interests."It said it was reprehensible that the APC and the Federal Government have stuck to lying on the real reasons behind the current fuel scarcity and "their exposed attempt to pilfer $1bn from the Excess Crude Account (ECA)".
The PDP charged the government to tell Nigerians the truth on its handling of fuel- related funds “particularly the circumstances surrounding the exposed diversion of funds in sleazy oil subsidy payouts” and “speak out on reports of fraud in the oil regime whereupon 18 unregistered companies were used to lift and divert $1.1 trillion worth of crude oil in the last one year."
In a statement yesterday, PDP National Publicity Secretary, Kola Ologbondiyan, alleged the current government is “not only grossly incompetent and corrupt but also a champion in the use of lies and manipulations against innocent and unsuspecting citizens”.
The statement adds: “We all know that it was convenient for the APC presidency to promise Nigerians that it will no longer import fuel only because the PDP government had already laid the foundation including revamping the refineries and ensuring a domestic production of 5 million litres out of the 25 million litres daily domestic consumption. Sadly, this incompetent APC government, in its almost three years, has not added one litre to the 5 million which the PDP administration was producing.”
Contrary to the notion that the APC government has scrapped fuel subsidy, the administration is in fact paying itself about N1.4 billion daily for importing fuel through the NNPC.The corporation’s Group Managing Director, Maikanti Baru, recently confirmed that a N26 subsidy was being paid on every litre imported.
The landing cost of petrol into the country stands at N171 per litre, as against the N145 retail price. Considering that the country’s daily consumption moved from an estimated 35 million litres per day to about 52 million litres, it would mean a total of about N1.4 billion is currently being paid to the exclusive importer.
When the Federal Government scrapped subsidy about two years ago and ushered in a regime of partial deregulation of the downstream sector of the oil and gas industry, the expectation was that private importers and market forces would have a freehand. The government, through the NNPC, however has been the sole importer and price modulator.
The weakness of the naira against the dollar and increasing price of crude oil on the international stage are compounding the fuel crisis in Nigeria, creating an unsustainable market. And with NNPC’s monopoly and the challenge of accessing foreign exchange, private importers have been forced out.
The Guardian learnt that despite the fact that the government is faced with the reality of growing prices of refined products at the international market, the current administration might be maintaining the current pump price for political expediency.Crude oil price currently stands at about $65 per barrel. On the eve of subsidy removal, it was around $40 while the exchange rate hovered slightly around N200 to $1. Today, the rate is almost double.
Vice President Yemi Osinbajo had justified the removal of the subsidy, saying: "The CBN simply did not have enough. (In April, oil earnings dipped to $550 million. The amount required for fuel importation alone is about $225 million!)”Experts, including the President of the Nigerian Association of Petroleum Explorationists (NAPE), Abiodun Adesanya, insisted the administration has worsened the plight of Nigerians by pegging the foreign exchange rate and the pump price of petrol.
Adesanya said the Buhari administration made two mistakes. First, it did not allow foreign exchange to flow. "The second is that the petrol subsidy should have been totally removed. What is making subsidy come back is primarily because of foreign exchange and increasing crude oil price.
"I am not surprised at the current situation. The quicker they let go, the better for us. Then, competition would come and ordinary Nigerians would become beneficiaries. Anything else will not work," said Adesanya.
According to the Executive Secretary of MOMAN, Obafemi Olawore, the crisis is getting worse because there is no adequate supply in the country."Our problem is that government is owing us and government has not paid. Nobody is talking to us about payment. We are left in the dark. Where are we going to get the money to import? If they are saying they will pay us by January, then we will come into the importation scheme in January,” said Olawore.
He added: "They have been giving us one ship per day, which is not enough. If the queues must go away, they should give us more than the national demand. The national demand is estimated to be about 35 million per day. There is already a very big gap. We have to fill that gap before we can have any improvement."
The Vice President of IPMAN, Abubakar Shettima, noted that about 80 per cent of the association’s members did not have supply.He said: "We are not getting products the way we used to. There is not enough supply, and the problem will not end until we have enough. Our supply gap is down by about 80 per cent."It is only the NNPC that import products. That is a monopoly. The problem is caused by the inability of the private importers to bring products. If they allow us to bring in products, it would be good. There would be availability. They currently owe us. Besides, we can't bring in products and sell at the rate of 145 per litre because of the high price of crude oil."
The Nigerian National Petroleum Corporation (NNPC) meanwhile has denied a report that it is depriving members of the Depot and Petroleum Products Marketers Association (DAPPMA) of the supply of products, especially petrol.The corporation in Abuja yesterday insisted it supplied substantial volume to DAPPMA, Major Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) to end the ongoing scarcity.
It regretted DAPPMA’s indictment of the NNPC when members had taken receipt of products from the Petroleum Products Marketing Company (PPMC), an NNPC subsidiary, and owed the company N26.7 billion as at December 21, 2017.The corporation said the statement by DAPPMA that the current crisis was due to the inability of the Direct Sale Direct Purchase (DSDP) partners of NNPC to deliver on their business obligations was unfounded and self-indicting.
Despite a concession by government to DAPPMA to obtain forex at an official rate of N305 per dollar for petrol import, its members have not been able to do so, leaving NNPC as the sole supplier to the Nigerian market.
NNPC assured the public that notwithstanding the increased supply it made in December 2017, it would provide 1.2 billion litres in January 2018, translating to about 40 million litres per day. Ordinarily, Nigeria consumes an estimated 700 trucks. That is about 27 million - 30 million litres per day.
Despite the current challenge, the NNPC has assured Nigerians there is no plan to increase pump price above N145 per litre. It said it would continue to maintain the ex-depot price of N133.28 per litre and that this would guarantee the pump price does not exceed government’s N145 per litre cap.
It implored stakeholders to support government’s efforts to bring a speedy end to the scarcity, stressing this is not a time to trade blame.Reacting to NNPC’s claim, DAPPMA’s Executive Secretary, Olufemi Adewole, told The Guardian: “We have read the NNPC statement and would not respond to all the issues raised by the corporation. We insist that petrol be made available to our members, so the country can overcome the supply hiccups.”
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