The recent round of naira devaluation coupled with the inability of petroleum marketers to obtain letters of credit from commercial banks to enable them import fuel are the real reasons behind the scarcity of fuel being experienced across the nation, the executive secretary, Petroleum Product Pricing Regulatory Agency, PPPRA, Farouk Ahmed has said.
Responding to questions from lawmakers at a budget defence session, the PPRA boss stated that these were the reasons behind the delay in the arrival of cargoes.
“Non-arrival of cargoes made it difficult for Premium Motor Spirit, PMS, to be delivered. What actually complicated it was the devaluation of naira – two times. The first one that took place on November 28, 2014 when Naira was devalued 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”, Ahmed stated further.
Assuring the public that the federal government would find ways to alleviate the hardship, Ahmed also promised that the agency would come down hard on petroleum marketers who sought to hike the price of petroleum unnecessarily.
“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. On 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,” he stated.
The executive secretary also announced that the total budget of the agency for 2015 is N7.798 billion with N63 million for capital expenditure, N48 million for overhead and N7.7 million for personnel.
The Nigeria National Petroleum Corporation, NNPC, was scheduled to defend its budget before the Senate committee on Downstream but the organization did not show up for the session.
The committee chairman, Magnus Abe, asked the Clerk of the Senate to issue another invitation to the NNPC, the heads of the three refineries and the Department of Petroleum Resources, DPR, to appear before the committee unfailingly on Thursday march 5.