A Review of the Nigerian Energy Industry

NNPC keeps N100bn fuel as strategic reserve

nnpc01 January 2014, Abuja – Petroleum products worth about N100 billion are currently kept as strategic reserve for the nation by the Nigerian National Petroleum Corporation (NNPC).

The spokesman NNPC, Dr Omar Farouk Ibrahim, said yesterday that the corporation has the mandate to keep at least 32 days of fuel reserve in case of any unforeseen circumstance.

Reacting to the $10.8 billion unremitted funds by the corporation to the federation account, Ibrahim said the 32-day reserve when multiplied by 35 million litres daily consumption of the country, at the rate N97 per litre, valued atN108 billion, is what the corporation is keeping for the nation but is not being captured as part of what the corporation is saving for the nation.

He said the law stated that not all of these products should be kept on the land some part of it should be on the high sea. “So we have to keep these ships on top of the sea, as well as pay demurrage on them. All these are part of our operational cost”.

According to him, a lot have been happening in the country which drains the corporation’s account but remained unnoticed by the CBN and other record holders.

He admitted that it was not possible to say that the corporation is clean completely, but it is certainly not as bad as many people are taking it to be.

“NNPC has not been receiving subsidy reimbursement for the last two years and the government has not captured that in the unremitted revenue”, he said.

“In 2012 almost singlehandedly NNPC imported fuel into the country without any intervention from the marketers but not a penny is given to NNPC as subsidy”

He said the same people that are accusing the NNPC are aware that the corporation has not been receiving its subsidy and they didn’t say anything about that.

“On the $10.8 billion that is said to be missing, our position is this, since January 2012 we have been importing fuel, but up to today, we have not been paid subsidy”.

He said billions of Naira are going down the drain from the corporation account due to the incessant vandalism of the pipelines and are repaired by the NNPC.

He said: ” Since the subsidy crisis, we kept the country wet with fuel. Secondly, pipeline vandalism is another issue. Technically it is a responsibility of government to provide enabling environment for businesses to strive,..unfortunately our 6,000 kilometres of pipelines are always hacked. We are losing so much from theft, from repair and from the idle time, all these are not taken into consideration”.



– Daily Trust

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