Kyari spoke this in Abuja while addressing the House of
Representatives Committee on Downstream, during an investigative hearing on the
importation of methanol-blended petrol.
However, in a bid to end the fuel scarcity and clear the
long queues at filling station in many parts of the country, petroleum products
marketing companies, under the umbrella of Major Oil Marketers Association of
Nigeria (MOMAN), have extended their opening hours in their jetties, depots and
filling stations to a minimum of 18 hours.
Kyari said with at least 2.1 billion litres of petrol in
stock, the fuel queues would end by next week.
The NNPC boss disclosed that given the current situation,
five other vessels conveying their next supply had been rejected and were not
allowed to sail into the country’s waters because they were coming from the
same shipping terminal that sent the four substandard cargos. He stressed that
the current challenge was because Nigeria imported all gasoline.
Kyari said, “Not a single litre of petrol is generated in
the country, that means 100 per cent of petrol you see in this country is
imported. Those imports are done on the basis of existing contractual
arrangements that we have. It is called the direct sale- direct purchase
process, which is simply with the best of practice to enable our suppliers
supply products to us on agreed terms and conditions.
“We have been doing this since I came on board and its part
of our supply mechanism. Even if all our refineries come up today, except
Dangote Refinery, we will still be in short supply of premium motor spirit
(PMS), because all of our refineries can only make 18 million litres of
gasoline. Consumption is certainly above 18million litres.”
Kyari further explained that the four cargoes that in
question met all the criteria on arrival and that was why they were allowed to
discharge into terminals and convey into ship.
While noting that there was no way, based on the current
specifications, that they would know that the PMS contained methanol, as it was
not part of their requirements at the load port, Kyari assured that they have
been able to trace all the volumes and quarantine them accordingly.
According to him, “By law, NNPC is required to ensure energy
security. Therefore, it is our responsibility to ensure that we provide energy
security for this country. This company must operate within the laws of this
country and this is what we have always done, and this is what we will continue
to do.
“For this current situation, I assure you that we have taken
every necessary step to restore supply into this country. We have placed orders
significant enough for us to cross into March, with at least 2.1 billion litres
of PMS in our custody. The situation you are seeing today I can assure you that
by next week, it will vanish.
“All things being equal, because of distribution issues that
we may not have control over, including the movement of trucks, otherwise, we
have robust supply arrangement to make sure that we exit this issue.
“On the basis of those contracts, our suppliers bring
products to us and we reconcile with them regularly. Part of those supply
arrangements is to give specification to your suppliers. These specifications
are bound by regulation and the latest that we are using is the one that is in
place since 2006.
“The current specifications we have is what is the subject
of all our import arrangement. So all our partners were given those
specifications and on the basis of this, those imports were made. Before a
vessel leaves the load port, they have to declare that those vessels meet our
specification; they will send it to the importer and confirm that it is the
specification. On the basis of that, you allow the sail away of the vessel.”
Speaking further, he said, “Now, once it comes to the
country, two things happen. We have NNPC surveyors, who are now also required
to validate that this product that we have meets the Nigerian specification.
“Also we have the regulatory authority who has to conduct an
independent assessment to confirm that this product meets the specification
that is in consonance with the existing regulation in the country.
“In case of all the problems we have seen, four of the
cargoes that are particularly in question today met all the criteria on arrival
and that was why they were allowed to discharge into terminals and conveyed
into ship.
“There is simply no way, based on the current specification,
that you will know these PMS contains methanol. It is not part of their
requirements at the load port. So we did not ask them to declare whether it
contains methanol because it is not part of our specification.
“Let me make it clear that methanol is not contamination, it
is a regular addictive to PMS. In China, up to 15 per cent PMS contain
methanol. On its own it is not a contamination, the key issue is handling
methanol. If we knew we will not accept this. Anytime methanol comes in contact
with water it emulsifies, it turns into a different chemical.”
Kyari lamented that one of the challenges NNPC faced was
lack of tracking mechanism to track trucks leaving the depot. He said this had
aided smuggling, as some of the fuel was transported to places that might not
be in this country.
The GMD disclosed that NNPC had filed litigation against
importers of the methanol-blended PMS considering the effect of the withdrawing
the products across the country.
He said, “What did we do? We have put all our suppliers who
are our contacts or commercial angle on notice that there would be liquidated
damages that will come from this. And also it is typical practice that we
compile liquidated damages that the direct supplier did not cost, he will
transfer that to the next person until it gets to the originating supplier, so
it is a back-to-back arrangement.
“That is always done so that once you file, it will get to the
last one. I do not know how many people are in the chain because this PMS
supply business in one cargo you can have three sellers, you can have two, and
you may have only one.”
However, a member of the House committee, Hon. Adediji
Olamide, in his submission, said ignorance was not an excuse in law. Olamide
said the committee would need a lot of documentation that NNPC.
Earlier in his remarks, Chairman, House Committee on
Petroleum Resources Downstream, Hon. Abdullahi Gaya, noted that the
investigative hearing was to ensure that the culprits were brought to book as
well as make recommendations towards curbing a reoccurrence of the incident.
He stated that the task ahead was challenging, including
examining the lessons, proffering solutions and way forward, and rejigging
supply and regulating the system to make them more effective and efficient.
Oil Marketers Move to Clear Fuel Queues, Extend Opening
Period to 24 hours
Meanwhile, MOMAN said where possible, its members would
extend their opening hours up to 24 hours a day in high density and flagship
locations where the security situation permitted. The association stated that
its members “shall operate these extended hours until the excessive queues
subside.”
The association made this known yesterday in a statement
signed by its Chairman and Managing Director of Ardova Plc, Mr. Olumide
Adeosun. The statement added that it was working with the regulatory
authorities and the Nigerian National Petroleum Company (NNPC) Limited towards
a resolution of the current fuel crisis.
Adeosun said MOMAN’s subject matter experts were active
contributors to the technical and commercial committees’ set up by the
regulatory authorities to re-stock fuel supplies, resolve the blending of
contaminated product and identify losses suffered by customers, operators and
third parties.
He said MOMAN members were also working with designated
laboratories to double-check the quality of product (re-blended or new) before
they are released into the fuels supply chain.
Most importantly, Adeosun maintained that MOMAN members had
committed resources towards enhanced operations and associated activities to
reduce the burden of the current fuel scarcity to customers.
The association urged its customers not to engage in panic
buying, as it might take a few days for normalcy to return, stressing that
panic buying increases the pressure on the supply chain.
NANS Condemn Attempts to Instigate Crisis, Attack NNPC
The National Association of Nigerian Students (NANS) has
condemned an alleged attempt by some unscrupulous elements to hijack the
adulterated fuel saga and resultant fuel scarcity to engage in a protest aimed
to instigate crisis in the country and damage the reputation of the NNPC
Limited.
NANS also bemoaned the serious fuel supply disruption across
the country occasioned by the importation of bad petrol, allegedly, by some
approved dealers of the NNPC.
The students’ body, in a statement issued yesterday and
jointly signed by its National President, Asefon Sunday, and Secretary General,
Adekitan Lukman, said it was in receipt of credible intelligence that certain
individuals had mobilised civil society organisations (CSOs) to embark on
protests to paint the NNPC leadership in bad light.
While acknowledging the avoidable situation the country had
been plunged into as a result of the fuel supply disruption, NANS frowned on
those it claimed wanted to make political gain out of a purely operational
issue, urging them to have a rethink.
The statement said, “While we acknowledge the avoidable
situation we are in as a country after almost six years of no queues and
scarcity, we frown on those who want to make political gain out of a purely
operational issue and urge those behind the attempt to put a spanner in the
smooth administrative structure of President Muhammadu Buhari at the NNPC to
desist forthwith.
NANS was in receipt of credible intelligence that certain
enemies of the Kyari leadership wanted to use the petrol scarcity as a excuse
to embark on protests to paint the NNPC leadership in bad light.
The association demanded a speedy resolution of all issues
and the normalisation of fuel supply across the country to ameliorate the
hardship being experienced by Nigerians.
NANS, however, commended the directive of President
Muhammadu Buhari for an inquiry into the dire fuel importation mishap, which
has put a strain on the supply chain and on Nigerians, saying it hoped the
inquiry would be decisive and far-reaching.
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