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PPPRA, Finance Minister blamed for petrol scarcity in Nigeria, N141bn owed to oil marketers

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ABUJA:  In the struggle to uncover the mystery behind the current situation in the Nigerian oil industry as regards to fuel scarcity, the Minister of finance, Okonjo Ngozi-Iweala, and the Petroleum Products Pricing and Regulatory Agency has been blamed for the con-current epidemic surrounding petroleum  scarcity in the oil-producing Nation.

This assertion was premise to the very fact that the Minister of Finance and the PPPRA were in the position to contain the situation from escalating as it is now.
According to report, the House of Representatives Committee on Petroleum Resources, downstream, declared that the relentless scarcity in the country would extend to next year if the outstanding debt of N141billion is not cleared with the oil marketers.
As a result of this delay, marketers enthusiasm has dwindled as banks refuse to extend further loans for their operations. According to the Chairman of the Committee, Dakuku Peterside, who made this ascertions, The report urges Nigerians to hold strong and prepare for the worst because it appears they will be an extended scarcity of Premium Motor Spirit (PMS) since Banks have refused to give out more credit to the marketers.
It also informed that System 2B has collapsed, system 2B distributes about 70 per cent of petroleum products from Lagos, Mosimi, Ejigbo, Ibadan, Ore, and Ilorin.
The report was presented to the House yesterday by the Chairman of the Committee, Dakuku Peterside.
The report further lamented the situation, which the Ministry of Finance has withheld payments of marketers under investigation as well as the inadequate provision in the 2012 budget for payment of subsidy. It also said not more than N306billion was allocated to PMS in the N888billion reserved for payment of subsidy
“The delay in payment to petroleum marketers traceable to the Ministry of Finance is adversely affecting the availability of reduced and credit worthiness of marketers. At a point, it took not less than six months to process payment due importers, it said.
“The collapse of Syatem 2B which distribute about 70 per cent of petroleum products starting from Lagos, Mosimi, Ejigbo, Ibadan, Ore and Ilorin severely affected the distribution system.
“Too many inconclusive investigations are affecting the willingness of banks to give credit, and thus importers given allocations by PPPRA cannot perform. For instance, out of 37 companies that was given fourth quarter allocation, only 19 performed by bringing the product into the country.
“There is a marked decline in investment in the downstream sector due to very low profit margin that has been gradually building up due to lack of storage facilities as has been observed over time.”
The Committee recommended the following,
1.     ”That the Ministry of Finance pay every marketer being owed and whose claims have been verified by all relevant authorities immediately.
2.    “That in 2013 budget, the Petroleum Support Fund (PSF) should be skewed in favour in PMS by the Ministry of Petroleum.
3.    “That all investigations carried out by the Presidency in the oil and gas industry should be concluded within a time limit.
4.    “That PPPRA should give allocation to only marketers that had performed
5.    “All necessary steps should be taken to determine the actual quantity of daily consumption of PMS that will enable the country plan ahead.”
A report from the House of Representatives Committee on Petroleum Resources (Downstream) stated on Wednesday that the persistent fuel scarcity in the country is expected to last until next year.
 The report confirmed that one of the reasons for the fuel scarcity is the outstanding debts owed oil marketers, the debts are over N141billion.
The report said the debts have weakened the spirit of oil marketers, saying the marketers hardly import the product because banks are no more willing to extend further credit to them.
It further blamed the Minister of Finance, Dr Okonjo Ngozi-Iweala and the Petroleum Products Pricing and Regulatory Agency (PPPRA) for the scarcity, adding that it was their responsibility to see to the problem.
The report from the House of Representatives Committee on Petroleum Resources (Downstream) was released following persistent long queues in filling stations across the country.
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BP, Trafigura, Vitol Lead Global Offtake Of Dangote’s Refined Products

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The Lagos based, 650,000-barrel-per-day Dangote Petroleum Refinery and Petrochemicals (DPRP) might be struggling for real acceptance in Nigeria’s domestic market, but the international markets appear to have embraced it with both hands.

As at Wednesday, November 6, 2024, three global oil dealers account for as much as 75 percent of refined products being lifted from the DPRP.

In a development touted as reshaping petroleum trading between Africa and Europe, Vitol Group, Trafigura Group, and BP Plc were listed by Bloomberg as the dominant buyers of fuels from the DPRP.

ALSO READ: Marketers Test Legality Of Banning Importation Of Refined Petroleum Products

Going by the data, it can be seen that the three global dealers accounted for the bulk of the plant’s shipments since flows began ratcheting up around the middle of 2024.

The report was backed by data from Precise Intelligence, a new oil-and-gas trading analytics firm based in Geneva.

The data showed refined products offtake from February 27 to October 10 with other customers, and indicated that the Nigerian market took 25 percent of total fuel purchases from the DPRP in the period under review.

Recall that the DPRP on starting operations, kick-started the production of diesel, aviation fuel, and LPG before subsequently progressing to the production of Premium Motor Spirit (PMS) (petrol).

The management of the DPRP has been consistent in expressing confidence that as soon as it becomes fully operational, it would peak at processing up to 650,000 barrels a day of crude into products including gasoline and diesel.

The implication is that at its peak, the DPRP would be the biggest single plant in Europe or Africa, conferring on it the capacity to reshape the regions’ oil and fuel trading.

Oil industry pundits note that the coming on stream of the DPRP has already trimmed a glut of Nigerian crude.

Analysis of the report showed that the refinery has loaded almost 6 million tons of fuel since starting up.

This is equivalent to almost 45 million barrels, loading rates averaged about 35,000 tonnes a day in October, its data showed.

The DPRP itself said late last month that the refinery had reached processing rates of about 420,000 barrels a day of crude.

Stakeholders are paying close attention, which sees the composition of fuel cargoes loading from the DPRP closely watched because it offers clues into where the refinery is at in terms of starting up different processing units.

On the products sold, the figures show that automotive gas oil — commonly known as diesel — is the largest cargo type being lifted, accounting for the highest proportion of shipments. This is followed by fuel oil, which ranks second in terms of volume.

Together, these two products make up more than 60 percent of the total output being collected from the plant.

Other significant fuel types being processed include gasoline, which is used for cars and other light vehicles, and jet fuel, primarily utilised by the aviation industry for aircraft.

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Minister of Power, Adelabu Champions Mini-Grids Amid Northern Power Crisis

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In the wake of a prolonged power crisis impacting Northern Nigeria, Minister of Power Adebayo Adelabu visited the Zawaciki 1MWp mini-grid project in Kano, underscoring the potential of decentralized renewable energy solutions to alleviate regional power shortages.

The project, operated by Bagaja Renewables, provides daytime electricity to the Gida Dubu community, offering a vital source of power as the region faces widespread blackouts.

READ MORE: BREAKING: NPF Arraigns VDM Over Impersonation

Sadiq Zakari, Managing Director of Bagaja Renewables, welcomed the Minister to the facility and highlighted the critical timing of the visit.

“Bagaja Renewables had the distinct honor of welcoming the Honorable Minister of Power to the Zawaciki 1MWp interconnected mini-grid,” Zakari said.

“This visit comes at a critical time, as Northern Nigeria endures a prolonged blackout, underscoring the urgent need for alternative power solutions.

The Zawaciki mini-grid has been instrumental during this crisis, providing at least 9 hours of daytime electricity to the Gida Dubu community, demonstrating the potential of renewable energy in addressing the region’s energy needs.”

Minister Adelabu praised the Zawaciki project as a model for interconnected mini-grids nationwide, noting its role as a sustainable solution for communities grappling with unreliable power supply.

“The Honorable Minister expressed admiration for the Zawaciki project, recognizing it as a viable proof of concept for interconnected mini-grids across Nigeria,” Zakari stated.

“He emphasized the importance of such initiatives and called on state governors and other key stakeholders to support efforts to decentralize and strengthen the nation’s power infrastructure.

By backing projects like Zawaciki, stakeholders can play an instrumental role in reducing reliance on the national grid and ensuring a more stable power supply for local communities.”

Zakari underscored the transformative potential of private-sector renewable energy projects in Nigeria’s power landscape.

He said, “As we have witnessed here at Zawaciki, private-sector-driven renewable energy solutions can transform Nigeria’s energy landscape. With the right policies and support, we can empower communities and enhance energy resilience, even in times of national power instability.”

In addition to the Zawaciki project, Bagaja Renewables is developing several renewable energy initiatives across Northern Nigeria. Among these are:

Barhim Estate, Katsina: A residential power initiative aimed at expanding energy access for households in the region.

Kura-Karfi Commercial Cluster, Kano: Focused on delivering clean and reliable power to commercial areas, this project aims to support local businesses and stimulate economic growth.

Kafin Hausa, Jigawa: With site fencing completed, Bagaja Renewables is preparing to begin technical design and engineering work for a mini-grid in Kafin Hausa, slated to start construction soon.

Zakari said, “These projects represent Bagaja Renewables’ unwavering commitment to building a resilient, decentralized, and renewable-powered energy future across Northern Nigeria.

“Bagaja Renewables is dedicated to collaborating with the government and stakeholders to scale up renewable energy solutions that will support communities, industries, and essential services.

“We believe that decentralized power generation is the future for Nigeria, and we are eager to contribute to a sustainable, reliable, and inclusive energy system for all.” he added

 

 

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Power Restored In Four Northern States After 10-Day Blackout

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Power has been restored across Plateau, Bauchi, Gombe, and Benue States, bringing relief to residents who endured a 10-day blackout.

The Jos Electricity Distribution Company confirmed that electricity was reinstated around 7:20 p.m. on Wednesday, prompting celebrations in Jos, the Plateau State capital, and other affected areas.

READ ALSO: JUST IN: Tinubu Appoints Major General Oluyede As Acting Chief of Army Staff

The prolonged outage was caused by the tripping of a major 330kV transmission line between Benue and Enugu states, leaving several northern states without power.

The blackout severely impacted daily life and economic activities, with residents expressing frustration over the disruption to businesses, healthcare services, and personal livelihoods.

In response, President Bola Tinubu took swift action, summoning Minister of Power Adebayo Adelabu and National Security Adviser Nuhu Ribadu to address the crisis.

Presidential Adviser Bayo Onanuga disclosed on Monday that President Tinubu directed the Ministry of Power and relevant agencies to expedite restoration efforts.

“President Tinubu is deeply concerned about the reports of vandalism and deliberate destruction of essential power infrastructure,” Onanuga said in a statement.

“The President has tasked TCN engineers with bringing immediate relief to the affected states and implementing a long-term solution to prevent future outages.”

 

 

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