03 March 2015, Abuja – Officials of the Nigeria National Petroleum Corporation, and heads of some subsidiaries under it did not appear before the Senate Committee on Petroleum ( Downstream) to defend their 2015 budget on Tuesday.
Chairman of the Committee, Senator Magnus Abe, lamented that by their action, they had deprived Nigerians an opportunity to know the reasons behind the current fuel scarcity in the country and possible way out.
But the Executive Secretary of Petroleum Product Pricing and Regulatory Authority, Senator Farouk Ahmed, told the senators that the fuel scarcity across the nation was caused by the two rounds of devaluation carried out by the Central Bank of Nigeria between November last year and February, 2015.
Ahmed told the committee that the devaluation caused huge confusion in the oil sector as the petroleum agency did not know the exchange rate to be used for the payment on fuel importation.
He said the marketers could not deliver the cargoes of fuel expected from them because they were not sure of the exact delivery cost as a result of the devaluation, adding that the old template used for paying the marketers was no longer useful.
Ahmed said PPPRA had to seek the advice of the CBN before it could eventually draw up a new template.
He, however, stressed that the crisis had eventually been resolved as the Budget Office on Monday approved payment for the outstanding bills that the marketers were owed.
He also said the truce was brokered after a meeting of the Ministry of Finance, PPPRA and other relevant agencies.
Ahmed said, “The recent events have to do with delay in the arrival of cargoes. Non-arrival of cargoes made it difficult for petroleum motor spirit to be delivered. What actually complicated it was the devaluation of naira – two times”.