FG Urges Marketers to Resume Fuel Import
Give deregulation a chance, says Kupolokun
By Mike Oduniyi in Lagos and Onyebuchi Ezigbo in Abuja
With a daily loss of about N400 million on fuel imports, the Federal Government has pleaded with major oil marketers to resume fuel importation to avert an imminent chaos in the supply system.
The Group Managing Dir-ector of the Nigerian National Petroleum Corporation (NNPC), Engineer Funsho Kupolokun, who painted a gloomy picture yesterday with the current position of the oil companies to back out of fuel supply, canvassed support from Nigerians for the downstream deregulation policy as a way out.
Speaking to THISDAY Board of Editors in Lagos, Kupolokun said both the NNPC and the Petroleum Products Pricing Regulatory Agency (PPPRA) had been holding talks with the marketers to resume fuel importation they abandoned since May due to high cost of procuring the products.
"I have been pleading with them, talking to them. The PPPRA also met with them yesterday (Monday), telling them to resume importation," Kupolokun said.
According to him, it is glaring that the NNPC alone cannot meet the fuel requirement of the nation, based on its limited resources and facilities.
Kupolokun, who warned of imminent fuel crisis ahead, said that if the marketers did not resume importation within the next two to three months, the country should be prepared to face fuel scarcity reminiscent of the pre-October 2003 era.
"We don't have fuel now. What we are seeing now is not unrelated to the fact that we did not load for three to four days last week. I do not expect that the problem will begin to show squarely now.
"Right now, we are talking of June, I have been pleading with them (marketers) and the last I heard from them is they will grudgingly import two cargoes, all of them collectively, by end of this month so that they share it. But I cannot guarantee that they will bring in the two cargoes," said Kupolokun.
The marketers, he said, abandoned importation due to high cost of petroleum products, with petrol landing at N51 per litre. He said the prevailing N41-N43 per litre price band was put in place when crude oil price in the international market was between $29-$30 a barrel.
Attempt by the NNPC and the marketers to adjust pump prices of fuel to reflect the increase in oil prices, was greeted with three days of nationwide strike and mass protest last week.
Marketers are, however, currently selling petrol at between N42.70 and N42.90 per litre, which industry officials said was to enable them recoup investment on fuel cargoes imported before the strike.
Kupolukon said that since May this year when marketers abandoned the import business, the NNPC was spending N400 million daily to subsidise imported fuel sold in the country. This, he added, was draining the corporation's purse.
"NNPC is subsidising the system to the tune of N400 million a day. If I continue like this, everybody in NNPC is worried...there will be attendant lost of jobs if we can't pay salaries and decay in the system. I am sure no Nigerian wants to see NNPC go under," he said.
While absolving both the NNPC and marketers for the perennial increases in fuel prices, Kupolokun said it was unfortunate that since the Federal Government deregulated the downstream oil sector last October, crude oil prices and freight rates had been on the upward trend.
He, however, said the policy remained the best solution to the country's fuel crisis. "All what we are saying is let's conclude with liberalisation, we should allow the system to work, we've seen it work in the last eight months," he said.
"We must identify and segregate the market into autonomous business units, we must promote efficiency and competition. We need to ensure cost recovery and reasonable margin for each business unit," he added.
Deregulation of the sector, according to Kupolokun, resulted in availability of fuel in all NNPC depots across the country for the first time.
On the situation with the four local refineries, Kupolokun said that the plants should be able to produce optimally from next month.
The Federal Government, he said, had pumped a total of $485.4 million between 1999 and 2003 to rehabilitate the refineries. The Turn Around Maintenance (TAM) on Port Harcourt refinery gulped $170.8 million, that of Kaduna refinery consumed $205.9 million while TAM on the Warri refinery gulped $108.6 million.
The refineries, with a combined production capacity of 445,000 barrels per day (bpd), were currently operating at about 65 percent capacity, said the NNPC GMD.
He, however, re-iterated that even with the optimal utilisation of the plants, the country would still need to import at least 13 million litres of petrol to meet total demand of about 30 million litres per day.
The NNPC chief executive added that he was against calls by the Nigeria Labour Congress that the Federal Government should utilise part of excess revenue from oil exports to subsidise domestic fuel consumption, as this could derail the liberalisation scheme.
"Close analysis showed that we will derail the entire liberalisation scheme because the major marketers and independent marketers will say bye, bye to importation and be contented to taking NNPC products and we are back to what we have done in the past 15 years," he said.
Meanwhile, the Federal Government, marketers and other stakeholders in the downstream sector of the oil industry have agreed to set in motion necessary apparatus to settle the rift arising from the increase in the pump price of petroleum products.
At an informal meeting held last night at the premises of the PPPRA, which was attended by officials of the NNPC, the agency and marketers, the parties discussed various issues connected with the present imbroglio and agreed to raise a new committee to look into the fuel crisis.
National President of Independent Marketers Association of Nigeria (IPMAN), Alhaji Abu Jajiri, who confirmed the development to THISDAY, said the decision to form a committee was also to get other stakeholders like Labour, students' body and civil rights groups actively involved in the negotiations.
Marketers had expressed dismay at the directive to revert to the former price of N38 - N41 per litre, demanding a total of N300 million as compensation as a condition for the downward review in fuel price.
Most of them as at yesterday have refused to bring down prices to the level ordered by the Abuja Federal High Court but have stuck to between N42.50 to N43 and N45 per litre of PMS.
Jajiri said the issue of price level, compensation to marketers and how to ensure the continued participation of the private marketers in the supply and distribution chain will form part of the matter to be thrashed out by the committee.
"We generally look at various possibilities and arrived at a conclusion to establish a committee to work out things", he said.
|
