Fuel scarcity: VP to plead with marketers as Senate raises supplementary budget to N521bn

 

 

Worried by the continued scarcity of petroleum products in the market, Vice President Yemi Osinbanjo, Monday night, intervened with a crucial call to marketers on the best way to end the current fuel crisis, which had engulfed the country in the last couple of months.

 

The call came as a proposed meeting between the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, suspended a meeting between him and major marketers, scheduled to hold in Lagos Monday.

According to Kachikwu, “The meeting was pushed forward to a future date because about three out of the five managing directors of the major oil companies were out of town.”

He added that “They requested I give them more time to see how far to regularise products supply in the market, as the scarcity eases.”

Kachikwu however disclosed that he is meeting with the independent marketers today to discuss what they are doing as well as “touring their depots to see what is happening in them.”

Kachikwu, who also doubles as the Group Managing Director, Nigerian National Petroleum Corporation, NNPC, was expected to plead with the marketers to resume fuel importation, particularly of premium motor spirit, PMS, or petrol, which is in very high demand in Nigeria, pending the release of the subsidy claims.

 

In response to a possible Plan B in the event the lawmakers did not approve the supplementary budget as expected, the minister said it means that “the burden will continue to be carried by the NNPC until the majors and other marketers are able to import.”

 

He expressed the Ministry and NNPC’s commitment to carry the burden of supply of products for the time being, noting that this is what Corporations are set up for tointervene duding emergency situations like this.

 

“We are moving about 3,000 trucks daily and if the situation persists, what we are doing now, which is Plan A will become Plan B. and we are ready to increase the truck loads until we are able to arrest the situation.

 

Refineries to be re-streamed mid-December

Kachikwu also said that there is no succor yet from the nation’s refineries, as 210,000-capacity Port Harcourt Refinery will be re-streamed by mid-December.

 

According to him, Port Harcourt Refinery will be re-streamed on December 6th. You know that when this happens you have to give the plant some time before it can begin to churn out products. So we are not expecting anything from Port Harcourt Refinery until mid-December.

“Same thing goes for Kaduna Refinery, which is expected to come back about that time if we dispatch with the pipeline issues.

 

Notwithstanding the state of the refineries, the minister gave the assurance that “We are preparing heavily for the Yuletide Season and we are going to bring in products massively to cater for demand.”

 

Marketers are sceptical

 

But marketers are sceptical whether the talks or meetings would yield the expected fruits, since the N413billion approved for subsidy claims had not yet been paid to them.

 

According to them, “No amount of promise will convince the banks to raise an LC (Letter of credit) if the claims are not paid.”

Against this backdrop, it is also uncertain what the Vice President’s intervention will achieve, since everything is dependent on the National

Assembly approving the supplementary budget today as expected.

 

NNPC’s Spokesman, Mr. OhiAlegbe, who told Vanguard that the Corporation was not aware of the majors meeting with the minister, however expressed the hope that “the legislators will do the needful and pass the supplementary budget. This will enable marketers to be paid their subsidy claims for them to resume fuel importation.”

 

He recalled that the NNPC “Met with Senate Committee on Downstream last Friday, and the Committee Chairman,Senator UcheEkwnunife, promised to lay down everything on the table.”

The Senate Committee on Appropriation on Monday directed the Federal Ministries of Petroleum Resources, Budget and National Planning and Finance to reconcile their records and include an additional N108bn in the N465.3bn supplementary budget submitted to the National Assembly by President Muhammadu Buhari two weeks ago.

 

The additional amount, according to the committee, was the subsidy claims due for payment to the major oil marketers between October and December 2015, which was not included in the N413bn subsidy claims due from January to September 2015.

The Chairman of the committee, Senator Danjuma Goje said the inclusion of the N108bn would enable the Senate to approve the money so that the minds of Nigerians would be at rest and the oil marketers would not hold the nation to ransom during the festive season as a result of the outstanding debts.

 

The Permanent Secretary, Ministry of Petroleum Resources, Mrs. Jamila Suara, told the committee that she was representing the minister, Ibe Kachikwu, who was in Lagos to hold meetings with major oil marketers.

 

She said her ministry’s proposal was N413bn, being a component of N120.552bn outstanding for 2014 and N292.8bn for subsidy from January to September 2015.

 

She said, “We just called the attention of the budget office to the fact that the proposal for the last quarter had not really been captured because it was about N108bn. When we started discussion on it, it was much earlier in the year; hence, the tidying up was not completed.”

 

The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions) Senator Rafiu Ibrahim, noted that there was no clear synergy between the Ministry of Budget and the Petroleum Resources Ministry.

 

He then asked whether the N413bn figure included the exchange rate differential and the accumulated interest being claimed by the importers or whether they were agreed figures between them and their bankers.

 

Also, the Chairman, Senate Committee on Petroleum Resources (Upstream), Senator Tayo Alasoadura, questioned the details of the subsidy request and demanded that exact payment due to each of the major oil marketers should be highlighted for the purpose of oversight.

 

 

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