The Executive Secretary of Petroleum
Product Pricing and Regulatory Authority, Senator Farouk Ahmed, said on
Tuesday that the fuel scarcity currently being
experienced across the nation
was caused by the two rounds of devaluation carried out by the Central Bank of
Nigeria between November last year and February 2015.
The disclosure came just as
officials of the Nigeria National Petroleum Corporation, and heads of some
subsidiaries under it failed to appear before the Senate Committee on Petroleum
( Downstream) to defend their 2015 budget.
Chairman of the Committee, Senator
Magnus Abe , lamented that by their action, they had deprived Nigerians an
opportunity to know reasons behind the current fuel scarcity and possible way
out.
But Ahmed, told the committee that
the devaluation caused huge confusion in the oil sector as the petroleum agency
did not know the exchange rate to be used for payment on fuel importation.
He said the marketers could not
deliver the cargoes of fuel expected from them because they were not sure of
the exact delivery cost as a result of the devaluation, adding that the old
template used for paying the marketers was no longer useful.
Ahmed said PPPRA had to seek the
advice of the CBN before it could eventually draw up a new template.
He, however, stressed that the
crisis had eventually been resolved as the Budget Office on Monday approved
payment for outstanding bills that the marketers are being owed.
He also said the truce was brokered
after a meeting of the Ministry of Finance, PPPRA and other relevant agencies.
Ahmed said, “The recent events have
to do with delay in the arrival of cargoes. Non-arrival of cargoes made it
difficult for petroleum motor spirit to be delivered. What actually complicated
it was the devaluation of naira – two times.
“The first one that took place on
November 28 devalued Naira from N155 to N168 to $1. The second one that took
place on February 18 brought the exchange rate to N199 to $1. “These two
developments brought a lot of confusion into the oil sector.
“Marketers were not sure of the
actual delivery cost. We had to draw a new template as advised by the
CBN. The delay we have now is caused by the November devaluation. But the
reality is that the policy is clear now.
“The Minister of Finance, PPPRA and
other agencies are working closely to ensure that outstanding bills are paid.
And that one had been done now.
“Yesterday, (Monday) we got an
approval from the Budget Office for payment of all outstanding bills. We have
adjusted the template now. We have to put the exchange rate at the interbank
rate. Now, we have a direction”
Meanwhile, the non appearance of the
the NNPC management to appear before the committee to give its own side of the
fuel scarcity story, had prompted the committee chairman, to read a riot act to
the corporation.
Abe said, “We invited NNPC to come
and defend their budget. They didn’t show up. They don’t even have the respect
to give any response to the invitation. We are directing the clerk to re-invite
the NNPC, Department of Petroleum Resources, Pipeline Product and Marketing
Company and all refineries.
“All of them must appear before this
committee on Thursday. All of us have our roles in constitution. The letter
should contain a a strong warning that NNPC must never repeat this before the
committee.
“NNPC has never agreed to bring
their budget for discussion. This is the same problem we have every year. I’m
disappointed that after we agreed on this issue last year, we are still back to
it.”
Naira devaluation causing fuel scarcity – PPRA
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on
Tuesday, March 03, 2015
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