Fuel Shortage to Ease as Kachikwu Meets Marketers in Lagos

Fuel Shortage to Ease as Kachikwu Meets Marketers in Lagos

30 Nov 2015
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•  PH refinery to resume operations this week
By Ejiofor Alike

There are strong indications that the acute fuel shortage in the country will soon ease as the Minister of State for Petroleum and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Ibe Kachikwu, will today meet with marketers in Lagos to appeal to them to resume importation, THISDAY has learnt.
This is coming as NIPCO Plc has emerged as the first major marketer to import products under the fourth quarter import allocation approved for the marketers by the Petroleum Products Pricing Regulatory Agency (PPPRA), while other marketers continue to rely on NNPC for supply of products.
THISDAY gathered that MT CHAMPION brought in 27,000 metric tonnes of petrol for NIPCO at the weekend, which translates to about 37 million litres.
A source close to Kachikwu told THISDAY at the weekend that the minister would come to Lagos to solicit the cooperation of the marketers to resume imports like NIPCO as part of the efforts to meet the two-week ultimatum given to the minister and the NNPC by the Senate to end the current fuel shortage.
“He (minister) will meet with the marketers to plead for their cooperation. Their subsidy claims have been approved and the money has been set aside. It is just for the National Assembly to pass the supplementary budget and they have promised to pass it on Tuesday.
“Already, NIPCO has brought in a cargo. So other marketers should bring in cargoes because their money is ready. That is why the minister wants to meet with them,” he said.
It was also gathered that the Port Harcourt Refining Company (PHRC) Limited will this week activate all its processing units as NNPC battles to restore normalcy in domestic fuel supply.
The planned resumption has been attributed to the completion of repair work at the refinery’s crude distillation unit (CDU), where one of the columns collapsed, forcing a recent shutdown of the 210,000 barrels per day refinery.
 The situation worsened the fuel shortages caused by the withdrawal of private marketers from importation.
The Senate Committee on Downstream, after a meeting with the officials of the Ministry of Petroleum on Thursday, had ordered the ministry and the Pipelines and Product Marketing Company (PPMC), a subsidiary of the NNPC, to ensure effective distribution of petrol, informing them that Nigerians would not be impressed unless they saw results.
Though PPPRA recently approved the fourth quarter import allocations for marketers, THISDAY gathered that most of them have not ordered for cargoes due to the non-payment of subsidy claims and their inability to access foreign exchange.
 The marketers are facing difficulties procuring foreign exchange from the interbank market to finance their allocations even as the N413 billion approved for the payment of their subsidy claims by the federal government is yet to be paid to the marketers.
 As Kachikwu makes efforts to woo the marketers to resume imports, the Port Harcourt refinery, which was shutdown in October, will resume operations this week to also help augment supply.
THISDAY gathered from sources at NNPC that the restoration of the plant would normally have required the urgent intervention of foreign experts with huge replacement costs estimated at N640 million, while delivery and mobilisation of contractors to site would have taken several months.
However, due to the urgency of the situation, it was learnt that the management of the refinery repaired the defective parts in the country, utilising over 150 host community youths in the process.
 According to sources, the entire workforce and staff of Warri Refinery and Petrochemical Company (WRPC) and Kaduna Refinery and Petrochemical Company (KRPC) were also mobilised for the repair work.
THISDAY also gathered that the cash crunch forced the workers of the refinery, including security guards, drivers, and support staff to raise N5.5 million to procure critical materials, as government funding was not immediately available.
 With the resumption of operations, the plant will produce petrol to augment imported volumes and help ease the current scarcity.
 Kachikwu had at NNPC’s town hall meeting at the weekend, credited the speedy repairs to total dedication, commitment and patriotism of the management and staff of the refinery.