Fuel Supply Looking Bleak with Two Refineries Shut Down & Nigerian Importers Blacklisted Due to Billion Dollar Debts

Fuel-ScarcityThe supply of Premium Motor Spirit (PMS) is looking bleak this January 2016. There are two main reasons why – one internal, and one external.

Firstly, the Nigerian National Petroleum Corporation (NNPC) shut down two refineries in the country this week in Port Harcourt and Kaduna due to pipeline vandalism. Their combined output was about 5.4 million litres PMS daily.

However, NNPC has said it’ll try to keep up production of PMS,

“In response to the unexpected setback, we have activated comprehensive remedial measures to sustain the prevailing stability in the supply and distribution of petroleum products across the country.”

Externally, Vanguard gathered in an exclusive report that foreign suppliers are currently blacklisting Nigerian oil suppliers. Why? Due to recent stringent regulations on obtaining foreign currency, the fall in the Naira over the last few months, the marketers are finding it hard to pay up in cash.

The newspaper reports:

“Marketers disclosed that they owe their foreign suppliers in excess of $1.29 billion, even as the marketers were paid only N413 billion in December 2015 for oil subsidies.

According to one of the marketers, who spoke in confidence, “yes, government paid us subsidy, but there is no dollar to buy anywhere. The Letters of Credit, LCs, that have matured since 2014 to 2015 are worth $1.29 billion. We are supposed to use the subsidy paid to us to buy the equivalent of what is due to our foreign suppliers, but the banks say there is no dollar.

“To show you how bad the situation is, one of us has outstanding matured LC of $75 million, but his banks are only able to provide $1.5 million last week. So how many weeks will it take the banks to offset the outstanding sum for him to be able to pay his foreign suppliers?

“Remember that what government paid to us was the Naira component of dollar transactions and government is still owes us the outstanding payments on the foreign exchange differentials. This is because when we brought in the products, exchange rate was N165 to $1, but by the time we were paid, it had risen to N197 to $1.

“This is why the foreign suppliers have blacklisted us until we are able to pay off our outstanding debts and back future transactions with dollar cash. Also, government did not pay within 45 days under the terms of our agreements, so they still owe us the interests on delayed payments.”

Consequently, he disclosed that except for a few marketers, mostly the majors, who already have foreign affiliations, all other marketers have abandoned further importation of petrol until government finds a way around access to foreign exchange.

NNPC to provide dollars?

The source further disclosed that in one of the meetings with the Minister of State for Petroleum, the NNPC had promised to provide marketers who were licensed to import products in the first quarter, with dollars to pay for their products, as a way to ease the foreign exchange challenges.

He added that it is uncertain that the promise had been fulfilled, as no products had come in yet.

However, NNPC’s Alegbe, in a text message response denied any knowledge of such a promise to marketers, saying: “NNPC? Dollars? I’m not aware NNPC made such a promise.”

He wondered if perhaps the marketer meant CBN or the Petroleum Products Pricing Regulatory Agency, PPPRA.

PPPRA pricing template

Despite assurances by the NNPC, skepticisms are high over the capacity of the Pipelines and Products Marketing Company, PPMC, to meet about 80 per cent of Nigerians daily PMS consumption demand of 40 million.

This is because, according to the marketers, they will be running a loss of an average of N7/litre, if they imported products under the PPPRA current PMS pricing template of N86.50/Litre, another reason many of them have abandoned further imports.

Another marketer, who spoke on the condition of anonymity, said: “The PPPRA has adjusted the template and fixed ex-depot price at N77/litre, it has pre-determined most of the expenses and other components that make up the price.

“When we circulated the new template to our members, we discovered that we will be losing an average of N7/litre if we imported PMS based on that template. So, no marketer can import from a loss situation ab initio. We have made our case known to government and we are waiting for them to respond.”

But none of the three PPPRA officials contacted picked their calls or responded to text messages.

Source: Vanguard

8 Comments on Fuel Supply Looking Bleak with Two Refineries Shut Down & Nigerian Importers Blacklisted Due to Billion Dollar Debts
  • obaro evaborhene January 22, 2016 at 10:48 am

    oh no

  • Nne January 22, 2016 at 10:58 am

    SMH

  • lol January 22, 2016 at 11:11 am

    One week one trouble under Aggrieved People Congregation!

    Shame baba

    • Niola January 22, 2016 at 12:09 pm

      @lol, this one is not attributable to any baba oo, its our fault ..
      some times I think mostly teenagers are on Bella Naija because obviously at 10pm when channels news is running they are in bed.

      So we are experiencing shortage of PMS because of the pipeline vandalism by the aggrieved Niger Delta Militants( how silly!”), that obviously has led to the shut down of two refineries

      In Nigeria, there is shortage of forex in country because our major source of revenue; oil has witnessed a decline in its price which is paid for in dollars, automatically less revenue, less dollars, also American has stopped buying oil from us, 3rdly the government also inherited a depleted foreign reserve by the past government and of course non-diversified economy
      Also Nigerians cant do without their imported goods and this has also put a lot of pressure on the naira, hence scarcity of dollars…
      If we do not collectively change our habits we are seriously in for it. lets tighten our personal budgets, do what is right, seek accountability from our leaders, this ride will be rough this year…but will pass when we all do the right thing…

      • nene+ January 22, 2016 at 2:29 pm

        When he went about I will deal with Shites, I will deal with Niger Delta militants if they try nonsence, who is that one called Nnamdi Kalu he didn’t know a leader should follow peace? Now you say we should share blame???? I laugh spanish…..

        A leader that is bent on using rubbish corruption fight vindictively should have known that Yaradua and co made peace with Niger Delta not because they are weak but for the sake of peace…….

        Don’t ask me to share trash with Buhari cos your type never beleive America refused to sell gun to GEJ to fight BH. You shouted thief when Ayo Oritsejafo air craft was used to go buy arms and ammunition in South Africa!!!! You all said Ayo is a thief not knowing FG disguised to buy arms to fight BH even when you knew the truth… kammar is a bitch
        Today it’s purely PMB blame all the way whether America or China buys fuel or not? It’s his fault and badluck! He indeed met empty treasury but first bailed out governors who funded his election????

        Empty budget he met have you compared GEJ expenses in bouyance and buhari expence target in famine?????
        GEJ 580. Buhari food 1.7 billion
        GEJ 24. Buhari 317 for wild life in Villa????
        Travel expence 59% increase and you shout empty reserve? Bring fact and figure not what Lai Muhammed told you.

  • Spanish Guitar January 22, 2016 at 12:13 pm

    CHANGE…One chance.

    • nnenne January 22, 2016 at 9:34 pm

      Thanks nene+.
      I need not say more.
      Lessons learned, treat everyone fairly, even the voiceless, those without ” connection”…
      Karma is indeed a bitch.

  • chanji January 23, 2016 at 12:16 am

    buhari has finished this country, what did we do to deserve all this ? how can a country that boast of the best intellects in africa vote in an illiterate with his bunch of clueless cabinet members . chai

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