LAGOS — Nigeria’s difficulty to import refined petroleum products, particularly, Premium Motor Spirit, PMS, also known as petrol, has worsened as foreign suppliers have blacklisted Nigeria from further business until such transactions are dollar cash backed.
The development is further compounded with the deferment of about 5.4
million litres PMS daily production, as the Nigerian National Petroleum
Corporation, NNPC, yesterday, announced the shut down of Port Harcourt
and Kaduna refineries. The announcement came four days after the plants
The NNPC, in a statement by its Group General Manager, Group Public
Affairs Division, Mr. Ohi Alegbe, said the shutdown of the refineries
was as a result of crude oil supply challenges arising from the recent
attacks on vital crude pipelines by militants in the Niger Delta.
Blacklisting of Nigerian importers
Vanguard exclusively gathered that the blacklisting of
Nigerian oil marketers by the foreign suppliers followed the challenges
faced by marketers to access foreign exchange due to stringent rules by
the Central Bank of Nigeria, CBN, on foreign exchange transactions.
Marketers disclosed that they owe their foreign suppliers in excess
of $1.29 billion, even as the marketers were paid only N413 billion in
December 2015 for oil subsidies.
According to one of the marketers, who spoke in confidence, “yes,
government paid us subsidy, but there is no dollar to buy anywhere. The
Letters of Credit, LCs, that have matured since 2014 to 2015 are worth
$1.29 billion. We are supposed to use the subsidy paid to us to buy the
equivalent of what is due to our foreign suppliers, but the banks say
there is no dollar.
“To show you how bad the situation is, one of us has outstanding
matured LC of $75 million, but his banks are only able to provide $1.5
million last week. So how many weeks will it take the banks to offset
the outstanding sum for him to be able to pay hiss foreign suppliers?
“Remember that what government paid to us was the Naira component of
dollar transactions and government is still owes us the outstanding
payments on the foreign exchange differentials. This is because when we
brought in the products, exchange rate was N165 to $1, but by the time
we were paid, it had risen to N197 to $1.
“This is why the foreign suppliers have blacklisted us until we are
able to pay off our outstanding debts and back future transactions with
dollar cash. Also, government did not pay within 45 days under the terms
of our agreements, so they still owe us the interests on delayed
Consequently, he disclosed that except for a few marketers, mostly
the majors, who already have foreign affiliations, all other marketers
have abandoned further importation of petrol until government finds a
way around access to foreign exchange.
NNPC to provide dollars
The source further disclosed that in one of the meetings with the
Minister of State for Petroleum, the NNPC had promised to provide
marketers who were licensed to import products in the first quarter,
with dollars to pay for their products, as a way to ease the foreign
He added that it is uncertain that the promise had been fulfilled, as no products had come in yet.
However, NNPC’s Alegbe, in a test message response denied any
knowledge of such a promise to marketers, saying: “NNPC? Dollars? I’m
not aware NNPC made such a promise.”
He wondered if perhaps the marketer meant CBN or the Petroleum Products Pricing Regulatory Agency, PPPRA.
PPPRA pricing template
Despite assurances by the NNPC, scepticisms are high over the
capacity of the Pipelines and Products Marketing Company, PPMC