Petrol Queues Will Soon Disappear – Okonjo-Iweala

Ngozi Okonjo-IwealaThe Minister of Finance and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, on Wednesday assured Nigerians that fuel queues will soon disappear from petrol stations around the country.

Briefing State House Correspondents after the Federal Executive Council meeting, the Minister said over N320 billion had been paid to the marketers and that all outstanding issues have been resolved.

She also noted that the scarcity was caused by a number of factors which included the depreciation in exchange rate.

She said, “We discussed that (fuel scarcity) at the FEC because Mr‎. President wanted prompt and quick action to improve the situation as fast as possible.

“So, after the briefing and discussion on both the financial and physical side, what emanated is that this situation, we hope will soon be resolved because both on the financial side, action has been taken and it is being implemented through the Ministry of Finance and the Governor of the CBN.

“Let it be known that in December we paid N320.2 billion to marketers to settle their claims and as of now, what we have approved by Petroleum Products Pricing and Regulatory Agency is about N185 billion on Sunday, which we are issuing sovereign debt notes to which is tantamount to having government guarantee that they will be paid.

“But the long and ‎short of the matter is that the financial issue has been taken care of.

The Executive Secretary, Petroleum Product Pricing Regulatory Agency (PPPRA), Mr Farouk Ahmed, had on Tuesday blamed the scarcity of fuel 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 N155 to N168 to $1. The second one that took place on February 18 brought the exchange rate to N199 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 the country.

PPPRA Explains Reasons Behind Petrol Scarcity

Fuel ScarcityThe 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.

KPMG indicts NNPC over $65 million demurrage

An official of KPMG, an audit firm, has revealed that the inefficiency of the Nigerian National Petroleum Company (NNPC) in the payment of demurrage on imported fuel at the ports has cost the country $65 million.

The official of the audit firm, Mr Dimeji Salaudin disclosed this when he appeared before the Senate Committee investigating the management of fuel subsidy in the country.

Mr Salaudin also told the committee that the Petroleum Product Pricing Regulatory Agency (PPPRA) overpaid oil marketers a whopping N25 billion in subsidy.

The Senate committee had summoned KPMG on Thursday over its failure to tender vital documents relating to the fuel subsidy scheme.

Not wanting to incur the wrath of lawmakers, two officials of audit firm KPMG appeared before the senate committee investigating the management of the fuel subsidy scheme.

The Minister of Finance had commissioned the international auditing firm in 2010 to review the subsidy regime from January 2007 to June 2010.

Giving details of the report, the KPMG representative said they discovered from their investigations that documents from the PPPRA to pay oil marketers were doctored.

The KPMG official also faulted the governance framework of PPPRA describing it as weak.

The committee directed the Minister of Finance to appear before it on Tuesday 5th June and also subpoenaed the CEOs of Oando PLC and Folawiyo Petroleum Company Limited to appear before it also on Tuesday.