NNPC to slash fuel imports by 20 %

Dec 20, 2004 01:00 AM

Nigerian National Petroleum Corporation (NNPC) said it would slash by 20 %, the number of cargoes of fuel to be imported for first quarter of 2005, following the streaming of all its four refineries.
The Nigeria Labour Congress (NLC) has, however, directed the 36 state chapters of the Congress and Abuja to begin mass picketing of fuel stations that failed to observe the new price regime approved by the Federal Government in November in the wake of planned nationwide strike by Labour and the civil society.

NNPC will be awarding contracts for the importation of about 49 cargoes of premium motor spirit (PMS) popularly known as petrol, for the first quarter (January-March) 2005, compared to 62 cargoes ordered for the fourth quarter this year. The cut in the orders, which may further pitch the corporation against the army of product importers already lining up for the contracts, according to NNPC officials, followed the increase in local production of the fuel.
Available statistics showed that the Port Harcourt refineries were running at 60 % of installed capacity of 150,000 bpd compared to the average 50 % achieved in the last six months, while the Kaduna refinery had raised its operating capacity to 35 % of the installed 110,000 bpd.

NNPC Group Managing Director, Engr. Funsho Kupolokun, said that the 125,000 bpd Warri refinery has also resumed production when crude supply began on November 25, 2004.
"With the four refineries running, the impact is that we are going to reduce the imports for first quarter 2005. We have planned to reduce by as much as one-third," said Kupolokun. "With the reduction in import next quarter, if we still maintain operations at the refineries as we have come on stream, we will definitely replace the imports which we are making," he added.

The NNPC is aiming to reduce imports due to the strain on its finances. According to Kupolokun, the corporation was losing about N 350 mm per day to subsidise imported fuel as at August 2004. He, however, said the corporation would still engage in imports because the total output from the local refineries would not meet total national demand.
"The nation's current premium motor spirit requirement of about 30 mm litres a day cannot be met by the local refineries as they can only produce about 17 mm litres per day even at the best of times, thus leaving a short fall of about 13 mm litres per day for importation," he said. Kupolokun emphasised the need to sustain deregulation in order to bring in more players in the fuel supply and distribution business. Meanwhile, the NLC said reports reaching it indicated that marketers have failed to implement the new product prices agreed with the Federal Government to avert the planned strike.

In the deal brokered by the Senator Ibrahim Mantu-led Palliative Committee, government had directed a reduction in petrol price to N 49 per litre from N 53, kerosene and diesel to N 52 a litre from N 63. The NLC has therefore directed the 36 state chapters of the movement and Abuja to begin mass picketing of fuel stations that failed to observe the new price regime.
The directive to the states followed the expiration of the seven-day ultimatum issued by Labour to Federal Government to enforce the new price of N 49 or face the wrath of workers. The palliative committee only recently expressed reservation over the non-compliance by the marketers. It, however, noted that it was beyond its power to enforce the agreed price.

In a letter addressed to the chairmen of the 36 state chapters and Abuja, entitled "Enforcing the Official Prices of Petroleum Products," NLC said that reports from various parts of the country clearly show that marketers have failed to implement the new prices.
"The reality we face in the country today is that the federal government has left the citizens at the mercy of marketers who are playing their traditional role of shylocks. This is an intolerable and unacceptable situation. You are therefore by this letter directed to set in motion machinery for enforcingofficial prices in your states if by December 15, petroleum prices are not sold at their official prices," NLC said in the letter signed on behalf of the General Secretary by Benson Upah.

The NLC advised the state chapters to work with the 29 affiliate unions of the congress and the civil societies in enforcing the order, noting that all the past struggles of Labour and its allies would be in vain if the products were not sold at the official rate. Particularly, NLC described as unhealthy the " unholy alliance between the Petroleum Products Pricing and Regulatory Agency (PPPRA) and fuel marketers not just to sidetrack the official prices but also to nakedly exploit the Nigerian people"
Labour said that the situation has been made worse by official complacency which has resulted in the official creation of artificial scarcity of the products in various parts of the country, especially in Abuja. NLC said that its resolve to picket the fuel stations is because the Obasanjo administration had abandoned Nigerians and vacated its duty and responsibility to the populace. It noted that Nigerians have no other option than to defend their collective interests.

NLC urged government to wake up to its responsibility by ensuring that official prices are enforced in various parts of the country. Labour had issued a seven-day ultimatum which expired.
In the letter addressed to the Secretary to the Government of the Federation, NLC declared it would not tolerate the current situation, affirming that it would mobilise the workers and its allies to resist the non-implementation. The workers movement stated that even at N 49, fuel price is still the highest among OPEC member countries.

Source: LiquidAfrica
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