December 1, 2022

How NNPC Return Sanity To Petrol Supply In Nigeria

7 min read

Only recently, Nigeria’s petroleum downstream subsector witnessed a major setback. Just before February gets midway, there was a major disruption in the supply and distribution chain of Premium Motor Spirit (PMS). Filling stations across the country were thrown into chaos, with motorists spending days in long and snaky queues, endlessly waiting for their turns at the pump. Not only for Nigerians who are the major bearers of this brunt, but the disappointment was also a huge embarrassment for the Government.

The question to ask is, how did all that start? It all began with the discovery of Methanol-blended petrol, otherwise known as Off-Spec fuel, by the Nigerian National Petroleum Company (NNPC) Ltd and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). This led to the immediate withdrawal of the commodity from the markets across the country. Ironically, unscrupulous oil marketers cashed in on this unfortunate accident in the name of profiteering, extorting the common man through exorbitant prices!

It is, however, heartwarming to see that at the moment, the situation has improved. Normalcy has since been restored. There is a significant abundance of petroleum products -not just PMS – across the length and breadth of the country. Motorists are now called into filling stations to come and buy. Recall that at the peak of the crisis, Nigerians were buying a litre of petrol for N300 and more depending on the location, need and desperation of the buyer! Today, however, almost all the states are wet with products and Nigerians are buying at the regulated price of N165/litre.

Amid all these PMS brouhahas, it is important to make introspection and explain the crucial role played by the NNPC, as an ultimate supplier of last resort and the custodian of national energy security, in resolving this crisis:

NNPCs Proactive Approach Saved Millions of Cars:

It is significant to note that shortly after the discovery of the off-spec fuel, NNPC, in collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), immediately swung into action, by announcing a massive withdrawal of the contaminated products nationwide. This was in a bid to ascertain the levels of methanol and determine the appropriate actions to mitigate the plethora of issues arising. Potentially, that singular proactive decision and timely intervention ensured that millions of cars that could have had their engines damaged were saved.

In a country where people are keen on making money off innocent citizens at the expense of quality and standards, NNPC, and its highly proactive leadership, made the right decision on behalf of millions of Nigerians and should be commended.

NNPCs Inquest Will Forestall Future Occurrence

Shortly after the withdrawal of the off-spec fuel, NNPC took its strategy a notch higher by launching a major investigation to unravel the causes of the unsafe quantity of methanol in the petrol imported into the country. In one of such inquests, the GMD/CEO NNPC, Mallam Mele Kyari summoned all the parties involved in the importation of the off-spec molecules. Before a viewing national audience, the GMD/CEO forthrightly explained the events that led to the discovery of the unfortunate incident; he also revealed the companies that imported the four petrol cargoes as MRS, Emadeb/Hyde/AY Maikifi/Brittania-U Consortium, Oando and Duke Oil, and ordered the holding back of all the affected products in transit (both truck and marine).

Shedding more light on the infamous consignments, Kyari said that petrol brought into Nigeria is usually not tested for methanol content, although it is a known fact that measured methanol is globally used to blend petrol; this is however not done for products meant for Nigerian Market. He also maintained that cargo quality certificates, issued at the loading port in Belgium, by AmSpec Belgium, indicated that the product complied with Nigerian specifications without indicating the percentage levels of methanol.

NNPC quality inspectors, including GMO, SGS, GeoChem and G&G conducted tests before discharge, which showed that the cargo also met the country’s standards,” the NNPC boss was quoted as saying. Most importantly, the NNPC helmsman apologized for the unfortunate development, assuring that it would never happen again, at least under his watch as the GMD/CEO.

NNPC Prompt Request for Emergency Products Imports Averted Major Crisis

After recalling the off-spec fuel and commencing an investigation into the matter, the NNPC asked oil trading firms to immediately embark on an emergency supply of petrol to replace cargoes that were rejected because of their poor quality. In most of his meetings with the oil traders, the NNPC CEO maintained that the only way out of the menace is for those product suppliers to go wherever they need to go in the world to look for alternative cargoes that will immediately replace the off-spec PMS they supplied.

He added, unequivocally: To prevent the distribution of the petrol, we have ordered the quarantine of all un-evacuated volumes and the holding back of all the affected products in transit (both truck and marine. All defaulting suppliers have been put on notice for remedial actions, and NNPC will work with the authorities to take further necessary actions in line with existing regulations. NNPC wishes to reassure Nigerians that we are currently sourcing additional cargoes to ensure product sufficiency.”

NNPC Sustained Products Supply & Distribution

Amid this ensuing crisis, NNPC fulfilled its promise of ensuring that over 2.3 billion litres of PMS were delivered before the end of February 2022. This was all aimed at totally arresting the situation. For instance in the week of Saturday, March 6 2022, the Company released details of the distribution of an additional 381.88 million litres of Premium Motor Spirit (PMS) to Nigerians. According to the PMS Evacuation Report of the NNPC, the product was lifted from the depot and distributed to Nigerians through retail filling stations within one week covering February 21st and 26th.

The release of the 381.88 million litres of petrol to Nigerians by the NNPC, represents an average daily distribution of 63.65 million litres. This is in addition to the 387.5 million litres of petrol that was released to Nigerians during the week covering February 14th to February 20th. A breakdown of the NNPC weekly national evacuation report showed that 80 per cent of all the distribution took place at the top 20 high loading depots. It stated that the remaining 20 per cent of the evacuation took place at the other loading depots.

NNPC Activated its Fuel Situation Taskforce

In what could be seen as another decisive step towards arresting the situation, the NNPC GMD/CEO immediately activated the company’s fuel situation taskforce, which involves mainly some Management and operational staff drawn from the various business entities of the NNPCs Downstream Directorate. In its war-room like daily meetings, the Taskforce reviewed the discharge and allocation of the daily product, supply to depots, vessel plan and visibility, intervention loadings and products dispatch to various states.

Other indices reviewed within the daily Taskforce meeting include days sufficiency, stock sufficiency and distribution, queue situations across all 36 states of the federation, vessel status, evacuation trend, proposed truck plan and depot performance. During its meetings, major decisions are taken with regards to ramping up product availability at filling stations nationwide, even as necessary interventions were offered to ensure that states which have queue challenges become adequately wet with products.

NNPC Took Charge of the Narrative Online

In past regimes, Nigerians usually have little or no information at all during fuel crises. It is noteworthy that the story changed during the last fuel crisis. When this latest fuel challenge came, the NNPC leveraged its Transparency, Accountability & Performance Excellence (TAPE) mantra by activating robust stakeholder communication. Knowing full well that in crisis, you are as good as how well and timely your brand provides the needed information, the NNPC ensured that Nigerians had access to up-to-date, real-time information on the situation, telling its story and taking charge of the narrative, especially online. For instance, on NNPCs verified Twitter handle which has about 400,000 followers, the company published the names of the top 20 high loading depots that were used to evacuate the PMS, on one of the weekends.

These were: Pinnacle-Lekki, which evacuated the highest volume of 40.25 million litres, AA Rano (22.43 million litres), AYM Shafa (19.23 million litres), Prudent (17.78 million litres), 11 PLC (17.78 million litres), Rainoil Lagos (15.93 million litres), and Avidor (15.63 million litres). It is also Fynefield with 12.39 million litres, Bull Strategic (12.2 million litres), Matrix (11.99 million litres), Koenamex (11.99 million litres), and Pinnacle (11.76 million litres). The rest are NIPCO (10.78 million litres), Swift (10.01 million litres), Total Apapa (9.5 million litres), TSL (9.19 million litres), Sobaz Nig Ltd (8.94 million litres), Mainland (8.88 million litres) and Ardova (8.83 million litres).

NNPC Redoubled its Stakeholder Engagement

Still, in the wake of the immediate past fuel crisis, NNPC intensified its stakeholder engagement efforts, beyond what was done in the past. At many fora, the GMD/CEO Mallam Mele Kyari engaged critical stakeholders across the entire downstream value chain. From Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Petroleum Tanker Drivers Association (PTD) and Independent Petroleum Marketers Association of Nigeria (IPMAN) to Major Oil Marketers Association of Nigerian (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and Association of Distributors and Transporters of Petroleum Products (ADITOP), it was very evident that the NNPC helmsman didn’t want to take chances. Add that to the regular interface with security agencies such as the NSCDC and the Nigeria Customs Service, and it becomes obvious that NNPCs stakeholder engagement during this past fuel crisis is indeed commendable.

But one may be tempted to ask, what did the NNPC Boss do differently, this time around? The answer is simple, in engaging these crucial stakeholders, he made it categorically clear to the petroleum products marketers that they cannot afford to throw away patriotism at the expense of profit-making. In essence, his message was that: while there is nothing wrong with making gains from sales margins in the business, they should be nationalistic enough to know that any lapse in fuel supply value-chain is a national issue which could trigger a major crisis.






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