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FG cuts April-June fuel import by 50%

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11 years ago

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The Federal Government, yesterday, cut down the importation of premium motor spirit, also called petrol, by 50 per cent for the period April to June  2015. A source in the Petroleum Products Pricing Regulatory Agency, PPPRA, told Platts in Abuja that the agency has issued permits for the importation of 1.5 million metric tonnes, compared to a permit of three million litres it issued for the first quarter of 2015.

The PPPRA source also disclosed that the number of import permits for fuel allocation for the second quarter was reduced to 36, from 42 in previous quarters. The reduction, Platts stated, was due to requests by oil marketers for lower allocations due to rising import costs and a government subsidy dispute, Confirming this development, Mr. Obafemi Olawore, Executive Secretary, Major Oil Marketers Association of Nigeria, MOMAN, said, “For the second quarter, all major marketers reduced their request for allocation because even they have stagnated on meeting first quarter allocations.”

Sources told Platts that despite the fact that the Federal  Government has paid N100 billion of the total outstanding subsidy debt, marketers are concerned the debt may continue to mount even on second quarter imports, particularly as they come after the presidential election set for March 28.

The PPPRA issued permits for around three million metric tonnes of gasoline in the first quarter, which the agency said at the time was to cover for the nearly absent output from domestic refineries.
It is envisaged that the ongoing turnaround maintenance of the countries ‘refineries will make up for the reduction in fuel import as it will help bridge the supply gap.
If the refineries fail to take shape by the second quarter, operators told Vanguard that the country might be plunged into serious fuel crisis.
The operators, who chose not to be named, further stated that if the target set for the refineries were not met, the NNPC might be forced to rely on its strategic reserves, which it had told  Nigerians is capable of serving the country for about 30 days.

The Nigerian National Petroleum Corporation, NNPC, had a couple of days ago, stated that the refining capacity of all the refineries in the country will grow to 90 per cent by April 2016.

Mr. Ian Udoh, Group Executive Director, Refining and Petrochemicals, NNPC, who stated this, further explained that the corporation has since last October, engaged the services of local engineers to undertake a comprehensive repairs and maintenance of the Kaduna, Port Harcourt and Warri refineries, adding that the contract was expected to last for 18 months, terminating in April. 2016.
He said, “The project started since last October, so we are looking at another 14 to 15 months or early next year. After then, the refineries should be in a good shape. 
“However, it is not going to be a sudden jump in production, it would be gradual. We have ordered a lot of materials, as the materials comes we install them using our local resources.
“It is an ongoing process that will allow the reliability of the refineries to continue improving across the period,   because most of our problems have to do with reliability of the plant. We can start all of them now, but from time to time one equipment will fail or some other faults will occur, and we have to shut down to repair.
“The frequency of shutting down to repair is rather high, but we expect that to gradually diminish until we have 90 per cent capacity by early next year, given the 18 months schedule that we have set.”
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