Nigerian National Petroleum Corporation (NNPC) has avoided what will have been a desolate Christmas by making the decision to revert to naira-based bills for surplus capacity for coastal transportation utilizing import and export window rates. According to stakeholders, the decision will stabilize the situation in the downstream oil subsector. This decision was taken to avert escalation of queues currently building up in major cities across the country following marketers and other stakeholder’s reluctance to continue with the distribution of Premium Motor Spirit, commonly called Petrol. Oil marketers and other stakeholders have expressed grave worry about such charges in foreign exchange and have tacitly rejected the Corporation’s request to participate in product distribution.
The Nigerian National Petroleum Corporation (NNPC) according to marketers, was not genuinely addressing the fundamental issue of product distribution. It was reported that product availability has nothing to do with the present situation citing a competent industry. Despite instructions to stop the US dollar charges, the issue remains as NIMASA and NPA still insist on collecting the US dollar charges. Report further explained that the Central Bank of Nigeria offered to provide foreign exchange for their operational requirements but they didn’t accept because Transportation Minister, Rotimi Amaechi, refused to accept. The NNPC is now charging US dollars on their vessels for which they were hitherto charging naira. These dollars are not available from CBN hence they’re sourced from the parallel market and the cost will be borne by someone.
Following an emergency meeting in Lagos on Tuesday 17th November 2021, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NIMASA, NPA, NNPC, Major Oil Marketers Association of Nigeria, MOMAN, and Depot and Petroleum Products Marketing Association of Nigeria, DAPPMAN, agreed to remove all barriers to smooth and effective product distribution. According to a statement issued at the conclusion of the key meeting, all parties committed to work together to ensure that products are distributed efficiently and effectively throughout the country. The NNPC further assured of products distribution and supply and immediate reverting to naira denominated invoices.
Both NIMASA and NPA agreed to engage their supervising ministries and the Central Bank of Nigeria, CBN, to seek ways of addressing the challenges relating to payment of levies and dues in US dollars. The NNPC would maintain product distribution and supply, as well as the immediate reversal to naira denominated invoicing, according to a statement signed by Engr. Farouk Ahmed for NMDPRA, Clement Isong for MOMAN, Yemi Adetunji for NNPC, and Olufemi Adewole for DAPPMAN. The NIMASA and NPA committed to work with their respective supervising ministries and the Central Bank of Nigeria (CBN) to find solutions to the problems of paying levies and dues in US dollars. Under the terms of the agreement, the NMDPRA would begin working with stakeholders on bridging claim reconciliation. They also agreed that the present bridging and administrative fees will remain in effect. In light of these assurances, the NNPC recommended motorists and other petrol consumers to stick to their regular buying habits rather than panicking, which may send the wrong signals across the country. The NNPC also stated that it is working with all stakeholders to ensure that items are delivered to all parts of the country smoothly during the festive season and beyond.
Due to the volatile and completely unpredictable nature of the prices with regards to Petroleum Products (AGO PMS DPK MGO) policies bounce and assessment on a regular basis is critical. In these cases, the NNPC acting swiftly to advert a scarcity of PMS had to reverse a policy that created a difficult situation for delivery of PMS. Making naira the acceptable means of transaction will cut through the bottlenecks and red tapes so Products can get to the final consumer easily.
Source: Oriental news, This day live, News now.
