CEM REPORT, OIL & GAS | The Nigerian National Petroleum Company (NNPC) Ltd has reassured Nigerians of sufficient supply of Premium Motor Spirit (PMS), popularly known as petrol in December.
The Company adopted measures including the extension of the Direct Sales Direct Purchase (DSDP) contract by six months, to sustain the supply of PMS throughout the country.
This was contained in a statement by Umar Ajia, the chief financial officer of NNPC Ltd, in Abuja on Monday, during a briefing with the ad hoc committee of the House of Representatives on the Fuel Subsidy regime in Nigeria, according to NAN.
“We have extended our Direct Sales Direct Purchase (DSDP) contract by six months, to sustain the supply of PMS across the country.
“The DSDP contract, in reality, ended in August and it is a very dangerous period to begin to retender for that because we are facing the winter, these are the difficult “ember months’’ that we normally avoid fuel scarcity.
“You know the scarcity in Nigeria is really associated with the Christmas period so if you now tender, the tendering process will take one or two months.
“So, what the board approved is to extend the contract for six months such that we will have passed the winter and the elections periods, otherwise we could have problems during the election.’’
Meanwhile, the NNPC during the continued investigative hearing of the House of Representatives Ad-hoc Committee investigating the petrol products subsidy regime from 2013 to 2022, stated that refineries supplying petrol to Nigeria are shutting down their operations and clamouring for green energy.
Group Managing Director of NNPC, Mele Kyari, who was represented by the Chief Financial Officer of NNPC, Umar Ajia, stated that the sum of N3.4 trillion is needed to subsidise an average of 66.7 million litres of petrol consumed daily, as against the N4 trillion approved in the 2022 Appropriation Act.
Ajia at the hearing revealed that Ogun and Oyo states were allocated more petrol than Lagos State, the country’s economic capital.
“We have about 1.6 billion litres incoming – land and marine. This is the minimum level we have to maintain, especially as we approach winter. Most of the refineries that we procure from are actually shutting down their operations because of the clamour for green energy and COP26 compliance. Even gas that is transition fuel for us is being given eight years. Of course, we do not agree.”
Also the Chairman of the Committee, Rep. Ibrahim Al-Mustapha noted that there is a need for an upward review of petrol prices in Nigeria, in line with the global price.
He noted that petrol was being sold for N536 per litre in the Niger Republic, N577 per litre in Mali and N389 per litre in the Benin Republic.
He also warned that subsidized Nigerian fuel was being smuggled to west Africa.
“If you have N5 million, you can cross the borders with trucks laden with petrol, and that is the bitter truth; we have porous borders; yes we have customs but I do not know.”
Recall that in June that the national president, of Natural Oil and Gas Suppliers Association, Bennett Korie, in a statement stated that it is no longer sustainable for the marketers of the Premium Motor Spirit (PMS), popularly known as petrol, to sell at N165 per litre anywhere in Nigeria. This is because they now buy the product for about N170/litre in some private depots, Nairametrics reports.
“Nigerians would have to adjust to the current reality, as it was no more feasible to dispense petrol at the approved rate of N165/litre in filling stations after purchasing the product for about N170/litre in some private depots.
“You can’t buy petrol at a high price and sell this low. Crude oil is about $130/barrel, the cost of fuel, if you hear it, you will run away; but you are selling at N165/litre. So definitely you don’t expect money to remain for government to run other activities when it spends heavily on subsidy.”