It was a game of wits between the Federal Government and oil marketers last week. The oil marketers, apparently taking advantage of the coming yuletide, had penultimate Sunday, given the Federal Government a seven-day ultimatum to settle outstanding debts totaling N800 billion, failing which depots would cease operations across the country.
The marketers requested that Forex differential and interest component of government’s indebtedness to them be calculated up to December 2018 and be paid within next seven days from the date of the letter sent to the government.
The oil marketers, comprising major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs) said the only way to avert the strike action was for the government to pay them the outstanding debts through cash option instead of the promissory note proposed by the government.
Sources reveal that the decision of the independent marketers to withdraw their services was ignited by the passive response from the Nigeria National Petroleum Corporation (NNPC) to their demands, on the ground that there was enough fuel to last across the country through the season.
Jilted by apparent indifference of the NNPC to their demand, the independent marketers promised to make real their threat by mobilising their rank and file for a show down.
However, in a swift response, the Federal Government through the Debt Management Office (DMO) and the federal Ministry of Finance, engaged the marketers in a negotiation to resolve the niggling issues and avert the impending strike action.
It could be recalled that the marketers had earlier rejected the Government promissory offer of N350billion, stating that the amount was not enough to clear outstanding bills, such as payment of staff salaries. Some of the outstanding payments due the marketers are also said to accrue from past administrations, making the issue more complicating, as the present administration seems to be reluctant to clear the outstanding debts.
However, as a matter of urgent intervention, the senate at its last plenary urged the Federal Government to pay outstanding fuel subsidy arrears to the oil marketers within the next two weeks. Chairman, senate committee on Down Stream, Kabiru Marafa, who moved the motion said,” the need became imperative to avert looming crisis in fuel supply due to non payment of accrued subsidy arrears to oil marketers”.
The senate also noted that the accumulated debt has forced some marketers out of business, while most of them are being subjected to “marinal injunctions”.
The senate later made some far reaching decisions to bring a lasting solution to the matter. Some of the resolutions which bordered on public interest includes that marketers should as a matter of public interest rescind their decision on the ultimatum to allow the Federal Government more time to look into their demands, engage the debt management office to determine an appropriate financial instrument for the payment of the debt”.
The higher chamber of the National Assembly, also urged the Federal Government to, “engage marketers and agree on outstanding liabilities to put an end to these subsidy claims, and direct all concerned agencies to immediately pay subsidy arrears as approved by the Federal Executive, Council (FEC) and passed by the National Assembly”.
Meanwhile, Special Assistant on Media and Communication to the Minister of Finance, Mr Paul Abechi, had in a press statement, disclosed that the Federal Government and the marketers have come to agreement, and the marketers have assured the public of product availability, while operations at all depots and sales would continue.
Abechi added that the government was reviewing the initial mode of settlement agreed upon by both parties.
He said, “After the meeting with senior government officials from the Federal Ministry of Finance, the Debt management Office, (DMO), Nigeria National Petroleum Corporation, (NNPC), Central Bank of Nigeria (CBN) Budget Office of the Federation, Accountant General of the Federation, and the Petroleum Products Pricing Regulatory Agency (PPRA), we are satisfied with the arrangement being made by the government to settle the clams of the petroleum marketers”.
However, as the meeting between the Federal Government and the Independent Petroleum Marketers continues today, pundits are of the view that strident measures should be taken to address critical issues in the Nigeria oil and gas sector.
Elder statesman and former Minister of Petroleum, Prof Tam David West, sees fuel subsidy as a monumental fraud which the Buhari administration must do away with to bring some sanity in the system.
David West who disclosed this in an interview with The Guardian newspapers, described a statement credited to Minister of state for petroleum that, “all refineries will work next year”, as scandalous, and unrealistic.
He said there was deliberate sabotage to make the refineries dysfunctional noting that during his time as petroleum minister, all three refineries in the country were working.
“Nigeria has no business importing fuel, and Nigerians need not pay as much as N145 per litre of fuel. Federal Government should make the refineries work, the amount spent on subsidy can build 10 refineries”.
On his part, the chairman, Port Harcourt Refinery Depot of the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Comrade Emmanuel Imimgba, said the association was ready to live up to its statutory obligations and ensure products availability provided the Federal Government lived up to their own bargain. He also called for the refurbishing of the refineries to make products available.
Some Port Harcourt residents and motorists who commented on the issue appealed to the Federal Government and the independent marketers to resolve all contentious issues at stake to save the people from excruciating pains especially during this period of lean economic fortunes.
A commercial motorist, Mr Kenneth Ibe, who plies Port Harcourt –Aba Road, said government should, as a matter of urgency, intervene to avoid any strike action that will worsen the situation.
“We, commercial drivers are ready to perform our duties, but we can only work well when there is enough fuel in the system. Any fuel scarcity will affect our business and also affect the people that are travelling, government should do something about it”.
The days ahead will however, determine the sincerity of government on the matter.
Buhari Thumbs Up For NLNG As NNPC Reviews Activities
The Nigerian National Petroleum Corporation (NNPC) held its head high as it commenced activities for the week following commendation from President Muhammadu Buhari for rallying shareholders to make Nigeria Liquefied Natural Gas Limited (NLNG) a company to reckon with.
Buhari who is also the Minister of Petroleum Resources gave the commendation at the ground breaking of the NLNG Train 7, recently.
He said that the NLNG had always been associated with success and had become a global company.
“The NLNG Train 7 represents another historic milestone in the history of NLNG. NLNG story has been associated with success,” he said.
The president also said that the NLNG had contributed 114billion dollars in taxes to Nigeria, and tthat with NLNG Train 7, there would be more jobs that would touch the lives of everyone particularly the host community.
He expressed joy how the NLNG had transformed from just a project to a very successful company in about 30 years.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, urged all shareholders to work hard to ensure the successful completion of the project which he said would boost government’s efforts to make Nigeria a fully industrialised nation.
Sylva also said the project would help the nation’s gas development aspiration.
NNPC’s Group Managing Director, Mallam Mele Kyari, that there was consensus among shareholders and board members to take the next step towards providing additional capacity which should be greater than what was on ground.
The NNPC GMD thanked President Muhammadu Buhari for his quick intervention which ensured the eradication of all pre-existing stumbling blocks on the path of NLNG Train 7 project
Also in the week under review, Minister of State for Petroleum, Sylva commended President Buhari at a ceremony to mark the execution of Shareholders Agreement between the NNPC, the Nigerian Content Development & Monitoring Board (NCDMB) and Zed Energy.
Total Nigeria Advocates Petroleum Subsidy Removal
Managing Director Total Nigeria, Plc, Mr Imrane Barry, says removal of petrol subsidy will help government to redirect its earnings to support infrastructure development for economic growth and development.
Barry made this known when he featured on a roundtable on Downstream and midstream at the Nigeria International Petroleum Summit (NIPS) in Abuja.
He spoke on the topic “The down/midstreams: Paths to the future through holistic and integrated solution”.
He said that signing of the Petroleum Industry Bill would help to unbundle the oil and gas industry and encourage development, private investment and create jobs.
“The petrol subsidy regime costs the country approximately 2.6 billion dollars (N1 trillion) per year and the country can no longer afford it.
“The removal of the subsidy will allow government direct more of its earnings towards infrastructure and social development,” he said.
He said that since government had declared decade of gas, there was need for Investment in Natural Gas.
He added that government needed to continue to push policies that would favour private participation and investment in the gas value chain, production, storage and distribution.
“Also, government needs to give incentives for investors in the sector, tax rebates etc to encourage long term participation.
“In the B2C sector, the government should put in place incentives for customers to switch from white fuels to gas powered machines for road transportation.
“They should continue investment in the nation’s critical infrastructure that aids trade and commerce,’’ he added.
He further called for the fixing of Apapa ports and other ports in Nigeria, development of interstate road network, fixing of rail lines for human and cargo transportation
Commenting on impact of COVID-19 pandemic to global oil market, he said that it made the market volume shrank by 30% while margins became weak(Losses) with aviation sector mostly affected for the following reasons.
He added that the global economy was badly affected generally due to airport closure, drop in international prices of jet fuel platts which , led to a huge loss in aviation business due to contractual agreement with international airlines coupled with large amount of “old stock” in tank.
“PMS is a regulated product, with the price fixed by the government; resulting in fixed margins.
“The devaluation of the Naira from N360 to N380 during the pandemic, coupled with rising inflation in the country further eroded this “fixed margin” for the players in the downstream sector,” he said
He urged government to ensure speedy passage of the PIB to help the sector play its part effectively.
Partners Execute Shareholder Agreement For Brass Products Terminal
The Nigerian National Petroleum Corporation, (NNPC), along with their partner, the Nigerian Content Development & Monitoring Board, NCDMB, and Zed Energy have executed a shareholders’ agreement for the establishment of a 50 million litre Petroleum Products Terminal in Brass, Bayelsa State.
The N10.5 billion Brass Petroleum Products Terminal project is expected to deliver an automated 50 million litre depot with two-way product jetty, automated loading bay, and 6 automated tanks for storage of 30 million litres of Premium Motor Spirit (PMS)and 20 million litres of Automotive Gas Oil (AGO) and Dual Purpose Kerosene (DPK).
While speaking at the signing ceremony, the Minister of State for Petroleum Resources, Chief Timipre Sylva commended President Muhammadu Buhari for his giant strides in the Niger Delta which is making a huge impact on the people of the area.
“I make bold to say today without any fear of contradiction that no President has impacted the people of the Niger Delta like President Muhammadu Buhari. Aside from what we are witnessing today, remember there is also the Brass Fertilizer & Petrochemical Company, the Oloibiri Oil and Gas Museum and the Oil & Gas Park in Ogbia, all under Mr. President,” the Minister stated.
Sylva added that the establishment of the Terminal further demonstrates Mr. President’s commitment to the enhancement of the livelihood of the Niger Delta people particularly, the riverine communities in Bayelsa State where people purchase products at exorbitant prices due to logistics challenges associated with transporting products to that area.
Speaking shortly after signing the agreement, the Group Managing Director of the NNPC, Mallam Mele Kyari said the Corporation was proud to be part of the project which aside ensuring products availability in all nooks and crannies of the Niger Delta, will also guarantee the nation’s energy security and generate employment.
“This Terminal will create 1,000 direct jobs during the construction phase, and over 5,000 indirect jobs during its operation. Considering the potential for employment when completed, this will definitely reduce youth restiveness in the Niger Delta area and will also address the problem of illegal refining in the area,” Kyari stated.
In his remarks, the Executive Secretary of NCDMB, Simbi Wabote stated that this milestone was as a result of strong interagency collaboration and public-private sector partnership.
“The NCDMB will continue to drive such partnerships across the industry to bring development in Nigeria,” he noted.
Earlier, the Coordinator of the Project and Group General Manager, National Petroleum Investment Management Services (NAPIMS), Mr. Bala Wunti stated that the project would enhance the economics of marine petroleum products distribution.
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