NNPC weekly: Corporation assures of stable product supply

Maikanti Baru, GMD NNPC
Group Managing Director of the NNPC, Dr Maikanti Baru

The Nigerian National Corporation (NNPC) started the week with strategising on how to ensure a smooth supply of petroleum products to avoid usual stressful yuletide season witnessed in the country.

The NNPC weekly, a Nigerian’s News track on NNPC weekly activities observed that the corporation between Oct. 29th and Nov. 3 vested energy on ensuring that 2018 yuletide season will be smooth and stress free for Nigeria

Dr Maikanti Baru the Group Managing Director of the Corporation hosted the National Union of Petroleum and Natural Gas workers in Abuja and inaugurated the newly elected NUPENG NNPC Group Executives.

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He charged the labour leaders to sustain the industrial harmony currently being enjoyed in the industry by resorting to dialogue instead of threats and confrontation.

He assured the members of maximum support towards re-engineering the union and helping the new union leaders to deliver on their campaign promises.

He charged the union to ensure a hitch free end of year fuel distribution.

Meanwhile, the union had affirmed its willingness to work closely with the Nigerian National Petroleum Corporation (NNPC) to ensure a hitch-free products distribution across the country throughout the end of year festive period.

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National President of NUPENG, Prince Williams Akporeha, gave this assurance when he led the National Central Working Committee (CWC) on a courtesy visit to the Group Managing Director of NNPC, Dr. Maikanti Baru, at the NNPC Towers in Abuja on Thursday.

He said the union did not see any reason to call its members out on any industrial action capable of disrupting the distribution of petroleum products between now and the end of the year, adding that even if any dispute arose, the union was confident that with the labour-friendly disposition of the NNPC GMD, Dr. Maikanti Baru, such would be resolved without any disruption of fuel distribution process.

“We have the opportunity of working with a very wonderful man who is the GMD of NNPC, a man who loves NUPENG and who also loves Nigeria. The way he has handled the industry since he came on board as GMD is unprecedented.

“We have a GMD who does not see his responsibility ending at the NNPC, but intervenes when we have issues with the International Oil Companies (IOCs) and other companies in the oil sector. So, he is somebody we are willing to work closely with to maintain the industrial harmony we are enjoying today.”

Prince Akporeha stated that with the kind of relationship the union had with the GMD, he and his colleagues assured Nigerians that there is not going to be any reason for them to stall operations or go on any action, saying the union has the confidence of the GMD.

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He revealed that Baru was receptive to the Industry unions matters, adding that with such kind of relationship, there is no reason for the union to embark on any industrial action that could disrupt products distribution across the Country, Prince Akporeha stated.

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He also commended the GMD’s giant stride in revamping products pipelines and strategic depots across the country which he said had reduced products theft and revived business activities across the Country.

DR Maikanti Baru at the Inauguration of Leaders of NNPC NUPENG chapter

Also, as part of measures to sustain the robust supply of petroleum products across the country the GMD also signed a six-month Direct Sale-Direct Purchase (DSDP) agreement with the British Petroleum’s (BP) trading arm, BP Oil International Ltd, for the supply of Premium Motor Spirit, also known as petrol.

This also was part of effort to ensure adequate supply of products in the country during the Yuletide period and beyond.

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According to the corporation, the latest agreement will represent 20 per cent of NNPC’s total PMS supply under the DSDP arrangement, which basically allows the corporation to exchange crude oil with international oil traders for imported petroleum products over a period of time.

Baru said as the nation’s products supplier of last resort, NNPC was committed to products availability by inviting new and old players to play in the Nigerian oil sector.

He said over the years, BP had demonstrated the capacity and robustness to augment the forecasted shortfall by NNPC, especially as the winter period approaches and as the nation’s elections get underway early into the New Year.

“As a reliable supplier, we think BP is a brand that we can always partner with. We trust the company and we have a good relationship with it. We also believe in the company’s commitment towards the development of local content,” Baru stated.

The NNPC helmsman also commended BP for choosing to partner with AYM Shafa, a local oil company, which he said had been expanding its downstream footprints across the nook and cranny of the country.

“BP’s partnership with AYM Shafa towards delivering on its DSDP obligations makes it a perfect fit for our plans to ensure that there is adequate supply of products throughout the coming Yuletide and even beyond the election period. In AYM Shafa, you are talking of a local company with over 150 retail outlets, depots as well as a good network of trucks nationwide,” Baru added.

Responding, Mr. John Goodridge, the Head of Marketing & Origination of BP’s oil trading business, said it was a great honour for his company to be trusted by the NNPC as one of its strategic suppliers.

“We are delighted to have the opportunity to work more closely with the NNPC. Going forward, we hope to grow this mutual relationship to greater things,” Goodridge added.

He further assured that his company boasts of a global network of refineries capable of generating the products to meet the specifications required by the NNPC.

He said the ultimate was to ensure that over the next six months, Nigeria does not witness any products shortages.

Introduced in 2016, the DSDP arrangement is a model carried out through direct sales of crude oil to refiners or consultants, who in turn supply NNPC with equivalent worth of products.

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Since its inception, the DSDP model has not only saved NNPC millions of dollars that would have been paid through demurrage, it has also proven to be a major component of the corporation’s petroleum products supply portfolio which ensures stability in products supply nationwide.

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Dr Maikanti Baru and Head of Marketing and Orginantion of BP international oil trading, Mr John Goodridge after signing a DSDP contract

The Corporation also in a statement dispelled the rumour of an impending review of pump prices of petroleum products, especially Premium Motor Spirit (PMS), otherwise called petrol.

The corporation through a release by the NNPC Group General Manager, Group Public Affairs, Mr. Ndu Ughamadu, affirmed that contrary to the misinformation trending in the social media, the Federal Government had no plan to review prices of white products either downwards or upwards.

Ughamadu stated that despite that fact that NNPC, since October 17, had been the sole importer of PMS into the country as the Oil Marketing Companies (OMCs) could not import due to the Open Market Price being much higher than the N145/litre official selling price, yet Government has no plan to review the market prices of products either upwards or downwards now.

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The statement cautioned rumourmongers to be wary of the impacts their ignoble act could cause on prices of petroleum products especially petrol as the festive period draws near, adding that if not checked, the insinuation of unsubstantiated price review can lead to artificial scarcity, hoarding of products by consumers which in turn may result in unwarranted queues and suffering of Nigerians at fuel stations.

The NNPC spokesman disclosed that members of the public should report any station which sells PMS above the N145 recommended price to the offices of the Department of Petroleum Resources (DPR) nationwide, saying the Department is authorised to monitor and regulate the Industry’s activities.

Ughamadu reiterated Baru’s assurance that the corporation had 37 days stock of PMS subsists, and had mapped out strategies to ensure that Nigerians have a hitch-free festive period.

NNPC Corporate headquarters in Abuja
NNPC Corporate headquarters in Abuja

Also, the GMD in the week under review was at the National Assembly to clarify and disowned the issues on alleged 3.5 billion subsidy fund.

In a presentation to the Senator Ahmad Lawal-led Senate Ad Hoc Committee saddled with the task of investigating the existence of the said fund, NNPC Group Managing Director, Dr. Maikanti Baru, explained that the assertion was totally different from the reality on ground.

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According to the NNPC GMD what is in operation is a 1.05 billion dollars fuel support fund created by the corporation in response to an earlier call by the National Assembly at the peak of the fuel crisis that the NNPC put an end to the supply hiccups.

Dr. Baru stated that propelled by this noble national requirement, the corporation initiated the move to raise a revolving fund of 1.05billion dollars sequestered from the NNPC dividends from the Nigerian Liquefied Natural Gas Limited.

He emphasized that the NNPC had no hesitation in acceding to the legislators’ call, making it the sole importer and supplier of white products in the country.

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Dr. Baru explained that from inception, the fund had been domiciled in the Central Bank of Nigeria, saying contrary to the assertion, at no time was it in the custody of the NNPC.

‘’For the avoidance of doubt let me restate that the fund had been jointly managed by the NNPC, the Central Bank of Nigeria (CBN), the Federal Ministry of Finance, the Petroleum Products Pricing Regulatory Agency (PPPRA), Office of the Accountant General of the Federation (OGF), the Department of Petroleum Resources (DPR) and the Petroleum Equalization Fund (PEF),’’ he said.

He also affirmed that NNPC did not independently spend a dime of the fund which he noted was primarily to ensure stability in the petroleum products supply in the country by providing enough volumes to augment the petrol yield from the Direct-Sale-Direct-Purchase (DSDP) crude for products exchange arrangement.

While stressing that the NNPC was fully aware that only the National Assembly has the statutory responsibility to appropriate on petroleum subsidy matters, the NNPC GMD explained that the fund was designed to take care of the under recovery arising from the extra volumes which the DSDP could not capture.

Dr. Baru called on the National Assembly to support the enthronement of enabling environment that would ease the participation of marketers in petroleum products importation, adding that it is not in the best interest of the corporation and the nation to maintain the prevailing NNPC’s monopoly in the subsector.

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Senate Ad Hoc Committee Chairman, Sen. Lawal pledged the readiness of his committee to pursue the assignment to a logical conclusion, even as he commended the NNPC GMD for his elaborate presentation on the contentious issue.

Senator Lawal adjourned the session to next Tuesday.

Dr Maikanti Baru with Senator Ahmed Lawal, Chairman, Senate Ad Hoc Committee on Fuel cost recovery

Furthermore, the Nigerian Society of Engineers (NSE), Abuja Branch, led by its Chairman, Engr. Chinasaokwu Okolie also visited the GMD who challenged engineers in the country to come up with technologies to help deepen the development of renewable energy in the country.

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He highlighted some of the corporation’s strides in the development of renewable energy across various states of the country using abundant natural resources like palm oil, cassava, and sugarcane.

He said the projects would help create the much needed linkage between the energy and agricultural sectors and urged members of the NSE to come up with technologies and strategies to enhance the integration process for the growth of the economy.

He congratulated Engr. Okolie on his emergence as chairman and commended the branch for its good work in training members and making engineering attractive especially at the grassroots.

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He said NNPC was committed to producing clean hydrocarbons in an environmentally friendly manner for the benefits of all Nigerians.

Baru and the chairman of the Abuja Chapter of the Nigerian Society of Engineers.

On his part, Chairman of NSE Abuja Chapter, Engr. Okolie, commended the GMD for his purposeful leadership which has led to greater investor confidence and growth of daily crude oil production from about 1.5 million barrels per day (mbpd) to the current 2.3mbpd.

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