FEATURES: NNPCL, Dangote refinery macabre dance over pricing
•as state oil groans under heavy debts to suppliers
Ilenre Irele
As Nigerians lament the ripple effect of fuel scarcity across the country, the nation’s oil company, the NNPC, continues to groan under the weight of huge debts owed both domestic and foreign suppliers of petroleum products. In the midst of this, the NNPC is embroiled in the gruesome macabre drama of opaqueness and cryptic fuel pricing conspiracy with the Dangote refinery.
It would seem there’s no solution to the sufferings and hardship the country intermittently experience over availability of fuel given that the federal government has not allowed independent marketers to lift fuel from Dangote refinery giving the exclusive rights to NNPCL.
Sources familiar with details of the matter told EnergyDay that there appears to be no solution to the fuel crisis in the short term, as suppliers are being owed $6 billion by the Nigerian National Petroleum Company Limited. Dr. James Ademo, an energy expert told this medium that NNPC is the greatest secrecy we have as far as institutions in the country are concerned. ‘’If NNPC says it’s afternoon, you better look at and check the weather. No one knows its book, recall that for months this ugly monopoly of corruption denied owing its western suppliers $6 billion until it could no longer hide. They told us about two years ago that the repair of our refineries is technically completed, yet the technical completion still subsists and people are still keeping their job at NNPCL.’’
Recall that about a month ago before Dangote rolled out supply, fuel crisis worsened as vessel and truck owners slowed down on supply and import amid mounting debts.
“Others who have (petroleum) products in their depots are slowing down supply to tankers,” one of the major suppliers told this medium.
As a result, the state-owned oil firm has been rationing stock and prevailing on major suppliers not to cut off supply.
An insider confided in EnergyDay that the debt situation is so critical and constitutes a major threat to the NNPC’s fiscal survival and indeed Nigeria’s energy sufficiency plans. As it is NNPCL has no choice to arm-twist Dangote refinery to get supply at a price both of them have refused to disclose to Nigerians. Yet, this is happening in a sector said to have been deregulated.
Although NNPC typically operates as sole importer of petroleum products, it partners with domestic and foreign suppliers to ensure adequate supply.
The oil company suppliers include international traders like Gunvor, Vitol, Mercuria, as well as domestic trading partners.
Reuters had in April reported that the NNPC Ltd owed around $3 billion to fuel traders for imported petrol.
Funny enough, a couple of weeks ago, the NNPC Ltd reacting to a report that the company is indebted to international oil traders to $6.8 billion and had not remitted revenues to the Federation Account since January, among other allegations, blatantly denied owing the sum of $6.8 billion to international traders.
Olufemi Soneye, the chief corporate communications officer of the company, then stated that the oil trading business, transactions are carried out on credit, so it is normal to owe at one point or another.
“Consequently, the following clarifications have become necessary: That NNPC Ltd does not owe the sum of $6.8 billion to any international trader(s).”
“But NNPC Ltd, through its subsidiary, NNPC Trading, has many open trade credit lines from several traders. The company is paying its obligations of related invoices on a first-in-first-out (FIFO) basis.
“It is not correct to say that NNPC Ltd has not remitted any money to the Federation Account since January. NNPC Ltd and all its subsidiaries remit their taxes to the Federal Inland Revenue Service (FIRS) regularly,” Mr Soneye said at the time.
It was learnt that $300 million was recently released to the NNPC Ltd by the Ministry of Finance Incorporated to defray concerns, but the intervention wasn’t significant enough to address the financial strain.
As part of measures to cushion the impact of its numerous economic reforms, the government through the state oil firm sells petrol at prices below the market price.
Since private importers cannot recoup their costs, the NNPC—-as sole importer—supplies the nation with about 40 million litres per day, with attendant increase in
