L-R: Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala; General Manager, Operations, Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Victor Shidok; and Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC), Mr. Joseph Dawah, during the public hearing and signing of agreement with relevant stakeholders in the oil sector to end the fuel shortage or have their licences revoked, in Abuja
. Energy crisis hits banks, opening hours shortened
.Lagosians protest fuel shortage, perpetual blackout
Ejiofor Alike, Obinna Chime in Lagos, Omololu Ogunmade, James Emejo in Abuja and John Shiklam in Kaduna
Nigerians will experience relief as Major Oil Marketers Association of Nigeria (MOMAN) monday resumed loading of petrol to various parts of the country, exactly after one week after suspending activities in protest over unpaid subsidy claims.
The Petroleum Tanker Drivers (PTD) section of the Nigerian Union of Petroleum and Natural Gas workers (NUPENG), which also withdrew tankers from the roads on May 18 in solidarity with the marketers have also resumed trucking of products to fuel stations nationwide.
It is expected that the independent marketers and other depot owners would follow suit.
The decision to resume loading by oil marketers followed a meeting convened monday by the Senate Committee on Petroleum (Upstream and Downstream) to resolve the fuel crisis, which had crippled economic activities nationwide and forced several banks yesterday to reduce their opening hours to the general public.
Although THISDAY could not reach the Chairman of MOMAN, Mr. Obafemi Olawore, one of the marketers confirmed that Oando, Conoil, Forte Oil, MRS, Total and Mobil Oil agreed to commence loading at their various depots.
“The strike was suspended because negotiations, which started in the morning, yielded fruit. We are making progress in the talks with government. So PTD has passed instruction to the drivers to resume loading,” he said.
The Western Zonal Chairman of NUPENG, Mr. Tokunbo Korodo did not pick his mobile phone when contacted, but investigations revealed that lifting of products by the drivers actually commenced around 3 pm at some of the depots.
Before the marketers shelved their action, Capital Oil and Gas Industries Limited had defied the strike and commenced the distribution of 13 million litres of petrol on Sunday.
Chief Executive Officer of the company, Mr. Ifeanyi Ubah had appealed to the marketers to suspend the action and negotiate with government.
Ubah said he could not understand why the marketers embarked on the action since the Pipeline Products and Marketing Company (PPMC) has enough stock for distribution to Nigerians.
“I don’t understand why we should not be loading the products. I don’t think that at this point, our company should be part of any sabotage against the incoming government. That is why we are here to address the drivers and commence loading immediately.
“I don’t believe that we should hold government to ransom. I strongly believe that dialogue should prevail; while we continue to give services to Nigerians, we should continue to negotiate. But to cage government is what I don’t think is very correct,” he explained.
Following the commencement of loading by Capital Oil, there was a very long queue of vehicles at the company’s filling station on the Lagos – Ibadan Expressway monday.
THISDAY gathered that vehicles started queuing as early as 2am in the morning, stretching as far back as the tollgate, resulting in a massive traffic gridlock on the expressway.
However, men of the Federal Road Safety Commission (FRSC) and Lagos State Traffic Management Authority (LASTMA) were on hand to control the traffic.
The strike was called off after the Senate yesterday brokered a truce between the federal government and the oil marketers, after which the latter resolved to resume the lifting of petroleum products six hours after a deal was brokered.
Oil marketers also resolved to lift petroleum products for 24 hours everyday for two weeks with a view to addressing the scarcity, which had crippled the nation’s economic activities for over a month.
The resolution was reached during a public hearing organised by the Joint Senate Committee on Downstream and Upstream Petroleum in the National Assembly where the federal government was represented by the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, while Olawore, represented the marketers.
Also involved in the agreement were the Chairman of National Association of Road Transport Workers (NARTO), Kassim Bataiya; the Chairman of Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Okoronkwo; and his counterpart in Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole.
The agreement was reached at a closed-door meeting called by the Chairman of the Joint Committee, Senator Magnus Abe, after a stalemate occurred at a the public hearing when the oil marketers as well as Okonjo-Iweala failed to shift grounds on the reasons for face-off between the federal government and the marketers.
At the commencement of the hearing monday, Okonjo-Iweala had accused MOMAN of sabotage as she disclosed how the marketers reneged on an agreement it reached with the federal government to end the fuel scarcity after being paid N154 billion.
Okonjo-Iweala had told the gathering that after the marketers were paid N154 billion, they still insisted on the payment of another N200 billion out of which she said N159 billion would be for foreign exchange differentials.
Recalling that considerable fraud was discovered in the subsidy scheme in 2011 when, according to her, only N252 billion was authenticated out of the N1.2 trillion subsidy paid during the time, Okonjo-Iweala said she had declined to sign the cheque of N159 billion demanded by the marketers to avoid being accused of signing unverified claims after leaving office.
According to her, the disagreement resulted in a resolution between the government and the marketers to set up a committee for verification of the claims with the resolve that fuel supply would be made available while the committee was handling the assignment.
She, however, said she was shocked when 24 hours later, MOMAN reneged on the agreement by failing to make fuel available to the generality of Nigerians.
The minister further revealed that when the marketers were owed over a trillion naira, they did not shutdown the economy, neither did they stop fuel supply for once and wondered why they now chose to cripple the economy over the claim of N200 billion if it wasn’t an act of sabotage.
The minister further explained that the marketers shutdown the country because they wanted all arrears they were owed by the government to be cleared before the end of this administration, a situation she said was wrong because government was a continuum.
Affirming her allegation of sabotage, Okonjo-Iweala asked why the marketers refused to supply diesel when it was common knowledge that no subsidy was meant to be paid for diesel having been deregulated by the government of President Olusegun Obasanjo over 10 years ago.
But Olawore, debunked the minister’s claim, saying they had failed to import fuel because only N32.5 billion of the N154 billion paid to them by the government accrued to them. He explained that the balance was deducted by commercial banks which funded the importation before they could access the money in the banks.
He also claimed that no supply was made because the banks refused to finance further importation of fuel, adding that despite the intervention of the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, the banks had refused to budge.
He also claimed that the tanker drivers were instrumental to the fuel crisis because they failed to lift fuel from depots. He also claimed that both petrol and diesel are lifted by drivers whom he said had stopped lifting.
He also said failure of the government to make verification an ongoing exercise contributed to the crisis.
Earlier, the Group Managing Director of Nigeria National Petroleum Corporation (NNPC), Mr. Joseph Dawha, had disclosed that NNPC had in storage no fewer than 981 million litres of petrol which he said could last for 24 days.
He said the situation became critical following the strike embarked upon by the NNPC chapter of NUPENG and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN).
At the end of the brief closed-door meeting, Abe said information reaching them at the time showed that NUPENG and PENGASSAN had called off their strike.
Abe also announced that Okonjo-Iweala and MOMAN had reached an undertaking on how the matter would be resolved, a move he said led to a resolution that lifting of products would begin in the next six hours.
He said: “I’m glad to announce to all of us that we have been able to reach some understanding that we believe will bring immediate solution to the problems in the supply and distribution of products nationwide.
“I also want to thank the GMD of NNPC for his determined intervention with the unions within NNPC that also resulted in a solution to the problems of the strike in the corporation just in the course of our meeting right now.
“So as we speak now, we have clear information that NUPENG and PENGASSAN strike in NNPC has been called off following the intervention of the GMD.
“So we have agreed on the following: The Minister of Finance will give an undertaking to the major marketers and PPPRA that the work on that committee being headed by the CBN would be concluded in verifying the outstanding claims.
“If it is concluded before the end of the life of this administration, it will be reflected in the handover note. If it is not concluded before the end of the life of this administration, then the fact that such a committee is set up and working will be reflected in the handover notes and a copy of the letter conveying the existence of this committee will be sent to MOMAN and DAPPMA and also to this committee.
“So on the basis of that agreement, MOMAN will offer whatever cooperation that is needed to enable lifting of products nationwide to begin within the next six hours.
“We have also agreed that NNPC is to direct all relevant staff at all depots to work 24 hours including Saturdays and Sundays for the next two weeks until normalcy returns to the sector.
“We have also agreed to reach out to the Lagos State Government to facilitate this agreement and reach some kind of arrangement with the tanker drivers that will allow access to the relevant depots to enable the lifting of products to commence,” Abe submitted.
Earlier, NARTO had told the committee that MOMAN was owed it N20 billion while the Petroleum Products Pricing and Regulatory Authority (PPRRA), disclosed that it had 425 million litres of petrol in Lagos; 102 million in Port Harcourt; 66 million in Warri; and 48 million in Calabar.
The agency also said working for 24 hours non-stop for two weeks as agreed at the meeting was not feasible because security and safety of persons to do the lifting for 24 hours could not be guaranteed.
Banks Shorten Opening Hours
But before NUPENG and major marketers announced the resumption of lifting and distribution of petroleum products, most banks in the country yesterday notified their customers of their intention to reduce their opening hours owing to unavailability of petroleum products.
The banks in separate notifications to their customers explained that the current shortage of petroleum products in the country had limited their ability to supply diesel to all their branches, in order to continue normal branch operations.
The significant drop in the country’s epileptic power supply was also having dire consequences on the operations of the financial institutions.
Findings showed that while First City Monument Bank Limited (FCMB), Guaranty Trust Bank Plc (GTBank) and Skye Bank Plc closed their branches at 1pm yesterday, Union Bank Plc, Keystone Bank Limited and Fidelity Bank Plc closed theirs at 2pm.
However, the banks advised their customers to use their respective alternative banking channels.
Specifically, FCMB in a text message to its customers explained: “Dear Customers, our branches will close at 1 pm from Monday, May 25, due to shortage of petroleum products. All our alternate channels will remain available.”
Similarly, GTBank, in a notice of early closure of its branches to its customers, stated: “The current shortage of petroleum products in the country has limited our ability to supply diesel to all our branches, in order to continue normal branch operations.
“Due to this, we unavoidably have to close our branches nationwide at 1pm, from tomorrow Monday, 25th May 2015.
“Whilst we have had to take this step to close branch operations early, we would like to seek your understanding at this time, and assure you that we will continue to work hard at finding alternative solutions to this situation and will advise you once the situation has abated.
“However, all our alternative channels will be fully functional and available for all your personal and business banking.”
In the same vein, Union Bank, which also gave similar reasons for the closure of its branches nationwide at 2pm, also disclosed that it relies heavily on diesel generators to run its operations.
Owing to the shortening of opening hours, in Kaduna State, many customers who trooped to the banks at about 1.30 pm yesterday to the banks were greeted with notices which were conspicuously pasted at their gates.
When the Kano Road branches of GTBank, Diamond Bank Plc and Keystone Limited were visited, a large crowd had gathered around their premises. Bank customers were taken aback by the sudden decision of the banks to reduce their operating hours.
Similarly, virtually all the commercial banks in the Federal Capital Territory (FCT) yesterday closed business at about 1pm due to the energy crisis in the country.
The limited service delivery is expected to continue until the fuel situation improves.
However, many bank customers in Abuja expressed dissatisfaction with the new closing time describing it as too early.
GTBank, First Bank of Nigeria Limited (FirstBank), Diamond Bank and Access Bank Plc, among others, all had pasted notices to customers to this effect.
However, some commercial banks visited by THISDAY in Abuja were a bit relaxed, being the first day of the notice and agreed to extended services beyond 1 pm.
Lagosians Protest Fuel Shortage, Perpetual Blackout
Another fallout of the energy crisis yesterday was the protest by Lagos residents who were fed up with the situation.
The peaceful protest which was held at the Agidingbi area of Ikeja, saw men and women chanting slogans expressing their grouse against the epileptic power situation and the lingering fuel scarcity.
With placards that read, ‘Enough of Blackouts’, ‘Enough is Enough’, ‘We Did Not Bargain for Suffering’, the protesters marched through Agidingbi area to register their grievances.
The President of the Lagos Chamber of Commerce and Industry (LCCI), Mr. Remi Bello, who noted with concern the unprecedented energy crisis facing the country, stressed the need for the situation to be fixed urgently.
LCCI also urged the incoming administration to immediately deregulate the oil and gas downstream sector (on assumption of office), in order to provide an enduring solution to the recurring problem of petroleum product scarcity, corruption inherent in the subsidy regime, the collapse of refineries, lack of investment in the downstream sector, loss of jobs and so on.
Taleveras Clarifies SAA with NPDC
Meanwhile, a local oil and gas operator, Taleveras, has provided clarification on the Strategic Alliance Agreement (SAA) entered into by the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of the Nigerian National Petroleum Corporation (NNPC), for Oil Mining Lease (OML) 19.
In a statement provided yesterday by Taleveras, the company said NDPC signed an SAA with Petrofac on OML 119, while Taleveras is the local content partner to Petrofac. It stated that Taleveras has no direct connection or business activity with NPDC under any SAA.
It further said not one drop of oil has been lifted under this Petrofac/Taleveras SAA contract with NPDC, adding that the records are there to show that Agip ENI are still the main contractors of the current SAA and it is only when it expires the Petrofac/Taleveras SAA will kick in.
It revealed that the Agip SAA would expire around 2020, once certain production milestones have been met, adding that Petrofac/Talevera is expected to invest enormous capital in drilling new wells around the production area before the expiration of AGIP’s current SAA, but this has not yet commenced.
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