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Fuel Scarcity Hits Again As NNPC Supply Collapses

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Fuel scarcity has resurfaced across Nigeria as many oil marketers shut their outlets against motorists and other buyers on the back of an unfavourable working environment.

Long queues have also been sighted at various retail stations across the nation with the product, BusinessDay’s findings revealed.

In Lagos, the queue sighted at the retail outlet of the Nigerian National Petroleum Company (NNPC) Limited in King’s Way Road, Ikoyi, has found its way to Mobolaji Johnson Avenue road while TotalEnergies at Eric Moore has shut its gate to motorists to avoid congestion.

Saitara Petroleum and Gas at Orile Iganmu has shut down its operations while Tinpet Nigeria Limited, which is trying to keep the lights on, has increased its petrol pump price to N605 per litre as at 01:14 pm today.

In Abuja, many marketers who were opened have hiked their pump price from N615 per litre to N625 per litre.

Matrix Energy Limited in Delta state sent out a memo today stating that the prices of petrol and diesel have moved to N598 and N958 per litre respectively.

Independent marketers have hinged this development on the inability to import the product despite deregulation of the downstream sector on the back of market Instability, bad roads and a shortage of foreign currency, with the price of a dollar currently trading for more than N1,045 on the black market.

Since NNPC is still the only importer of the goods, it was gathered that it had supply. However, its affordability remains a bane for smooth operations for marketers.

Abdulkadir Mustapha, the spokesperson of the Independent Petroleum Marketers Association of Nigeria (IPMAN) in Borno state, said: “The problem is that most private depots are out of stock because they are supplied by NNPC. Since NNPC is the sole importer, the private depots from which independents purchase products likewise rely on NNPC for supplies. Profiteering is also encouraged by this setup.

“We have had a difficult time picking products from NNPC in almost a week, which is why you are noticing this scarcity. The crucial aspect here is that, despite deregulation, NNPC remains the sole importer of PMS, with no other depot importing.

Some of NNPC’s portals have closed and are no longer issuing authority to lift to marketers in some of their portals.” This demonstrates that there is a substantial gap in the supply chain. However, the NNPC promised that they are anticipating products and will feed us very soon.”

Analysing the difficulties in distributing available products, Mustapha said: “Fueling a diesel truck to take products to and from the depot of origin either lagos to Maiduguri or Warri to Calabar to Maiduguri without servicing the truck and other minor and major repairs now cost N2 million.

“This shows that per litre of petrol transportation to the far north is not less than N65 per litre.” According to his analysis, the total cost per litre of petrol will stand at N657 per litre without a return from the investment or profit for the investment of N29.6 million.

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Order CBN to honour Letters of Credit– SINET to Tinubu, NASS

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Amidst several hardships facing the Nigerian populace, the Social Integrity Network, (SINET) has urged President Ahmed Bola Tinubu and the leadership of national assembly to compel the Governor of Central Bank of Nigeria (CBN) Mr. Olayemi Cardoso, to order and reconsider honouring the forward contracts that are genuinely backed up with proper compliant documents for utilisation against each Letters of Credit (LCs) opened by the commercial banks using the forwards as a hedge.

The group also urged the Federal Government to make further clarification concerning a statement credited to the CBN Governor on issues regarding the alleged and well-publicized revelations of a $2.4 billion forex trading fraud.

SINET recalled that “On February 5, 2024, the governor of CBN made this declaration in both his interactions with Senate committees and his interview on a national television, following the engagement of Deloitte Management Consultant to conduct a forensic investigation where he claimed that the said amount was uncovered.

A statement issued on Monday by SINET national coordinator, Ibrahim Issah, disclosed that “On the contrary, we wish to unequivocally state that these claims lack merit and do not take into account the consequences they will have on businesses, public perception, or the economy of our cherished nation and its implication on forex both at home and abroad.”

According to him, “Without sentiment, the claim is completely falsehood and unacceptable as he, the CBN governor, failed to consider its economic implications. It is pertinent to state that genuine businessmen and women across the country, borrowed Funds from commercial banks, some with interest rates as high as 30% to secure forex from the CBN through their respective commercial banks since CBN does not sell the dollars to individuals directly.

“The same funds have been deposited with CBN for the past one and half years for forwards allocated for which the Apex Bank is now claiming were fraudulent transactions. May we remind Mr. Governor that while the CBN allocated the forwards after collecting the naira for each forward allocated, the commercial banks used these same forward contracts as a hedge and issued Letters of Credit (LCs) to their various customers against their offshore credit lines and also as a sovereign guarantee to their offshore banks which stand unpaid till today as a result of the failure of CBN to honour the various forward contracts.

“May we also remind our CBN Governor that as a result of their failure to honour these contracts, the outstanding foreign loans continue to accrue interest (post-negotiation charges), which the commercial Banks are passing to their customers: the same customers you say do not have a genuine claim.”

The statement further stressed that, “The public would like to ask Mr. Governor the following questions: What will happen to the foreign bank that is expecting their payment to be paid back? What will happen to the businessmen and women who had borrowed Naira from commercial Banks and paid the same into the CBN account for the purchase of forex for over eighteen months? Who will bear the interest charged on borrowed funds locally? Who will bear the charges running against the offshore lines used in establishing Letters of Credit? What will happen to the businesses? What will happen to the employees that are dependent on the survival of the businesses that CBN is trying to kill?

“We call upon the senate president and, in fact, the president and Commander In-Chief of the Federal Republic of Nigeria to call the CBN governor to order and reconsider honouring the forward contracts that are genuinely backed up with proper compliant documents for utilisation against each Letters of Credit (LCs) opened by the commercial banks using the forwards as a hedge.

“Let us state categorically that the CBN is killing businesses by cancelling the forward contracts that were sold to them about 18 months ago at the rate of N450/dollar and now selling the same funds to the commercial banks and directing the bank to sell the money at the rate of 1,500/dollar to the same businesses who initially had a forward contract at the rate of N450/dollar.

“May we also remind Mr. Governor, that failure to honour these forward contracts is taking commercial banks longer time to clean the offshore lines already used for establishing Letters of Credit against which shipments have been done and payment made to LC beneficiaries by the offshore banks. The delays of the commercial banks to settle their Forex obligations to their offshore banks is making our country risk to be very high.

“Lastly, the public will like to call on the coordinating minister for the economy, Mr. Wale Edun to engage the CBN regarding this issue of undelivered forward contracts because at present in Nigeria, almost 60% of companies in the manufacturing sector have been closed due to the volatility of Forex in Nigeria in order to avoid the other 40% from also closing down.

“This will go a long way to help the few remaining manufacturing companies still in operation in Nigeria and also encourage the new investors that the president and commander in-chief of the federal republic is trying woo to bring their investments to Nigeria.”

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Senate Passes Sen Ashiru’s Bill To Establish National Road Transport Council

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The Senate on Tuesday granted first reading to a bill seeking to establish a National Road Transport Council which is to be saddled with the responsibility of regulating the road transport industry and the transport profession in Nigeria.

The bill titled National Road Transportation Council (Establishment) Bill 2024 is sponsored by Deputy Senate Leader Senator Oyelola Ashiru and was introduced to the Senate plenary after the Senators resumed from their 30 day recess.

Further details of the bill fronted by the Kwara South Senator reveals that if signed into law a council board will be established which shall consist of a Board chairman and six members drafted from each geo-political zone of the country.

More insights of the bill sighted by the Sun also states that the board shall be presided by a representative from Ministries of transport, commerce and industry and aviation and they shall not be below the rank of a Director.

As highlighted in the explanatory memorandum of the bill , [b]the functions of the proposed council include; creating an effective regulatory framework on road transport service operators; determining the standard of knowledge and skills required for road transport service operators; encouraging the advancement of education in road transportation; ensuring accessibility of road transport facilities, [/b]channels, and routes; monitoring the performance of the regulated road transport industry; conducting background check on road transport service operators; registering all road transport service providers and determine the fees for such registration; setting guidelines and general policies for road transport service operators; updating the Federal Government on its activities and progress through annual and audited reports; reviewing progress and suggest improvement within the provisions of this Bill and do such other things as are necessary or incidental to the objects of the Council under this Bill or as may be assigned by the Federal Government.

The bill received the nod of the Senators via voice votes presided by the Senate President Godswill Akpabio shortly after it was introduced to the floor of the Red Chambers by the Leader of the Senate, Senator Opeyemi Bamidele.

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