The Executive Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), Mr Farouk Ahmed, on Tuesday blamed the petrol scarcity in some Nigerian states on the inability of petroleum marketers to get letters of credit from commercial banks to enable them import fuel.
He also blamed two rounds of Naira devaluation carried out by the Central Bank of Nigeria.
“The recent events have to do with delay in the arrival of cargoes. Non-arrival of cargoes made it difficult for Premium Motor Spirit (PMS) to be delivered. What actually complicated it was the devaluation of naira – two times. The first one that took place on November 28, 2014 when Naira was devalued from 155 Naira to 168 Naira to $1. The second one that took place on February 18 brought the exchange rate to 199 Naira to $1.
“These two developments brought a lot of confusion into the oil sector. Marketers were not sure of the actual delivery cost. We had to draw a new template as advised by the CBN. The delay we have now is caused by the November devaluation. But the reality is that the policy is clear now,” he said.
The PPPRA Executive Secretary made the explanation at a budget defense session in the Senate in response to questions from lawmakers on the long queues at petrol stations across Nigeria.
Mr Ahmed, however, said the Federal Government was taking steps to remedy the situation and promised that the agency would come down hard on petroleum marketers who increase the price of fuel above 87 per litre Nigeria.
“The Minister of Finance, PPPRA and other agencies are working closely to ensure that outstanding bills are paid. And that one had been done now. On Monday, we got an approval from the Budget Office for payment of all outstanding bills. We have adjusted the template now. We have to put the exchange rate at the interbank rate. Now, we have a direction,” he maintained.
While defending the budget of the PPPRA, the Executive Secretary said the total budget of the agency for 2015 is 7.798 billion Naira with 63 Naira million for capital expenditure, 48 million Naira for overhead and 7.7 million Naira for personnel.
The Nigeria National Petroleum Corporation (NNPC) was scheduled to defend its budget before the Senate Committee on Downstream but the organization did not show up for the session.
The Committee Chairman, Senator Magnus Abe asked the Clerk to issue another invitation to the NNPC, the heads of the three refineries and the Department of Petroleum Resources (DPR) to appear before the committee unfailingly on March 5.
