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Kerosene Supply: 78 Marketers May Demand Refund of Payments from NNPC

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Kerosene

Marketers of petroleum products who paid the Nigerian National Petroleum Corporation (NNPC) for supply of kerosene but could not get the product may seek for the refund of the payments.

Investigation revealed that about 78 marketers and depot owners paid the Pipeline and Products Marketing Company (PPMC), a subsidiary of the NNPC for supply of kerosene and petrol from imported vessels.

Apart from the marketers and depot owners who paid for direct supply from the PPMC vessels, it was also gathered that over 2,000 bulk buyers of the product have also paid for supply from the depots that have throughput arrangement with the PPMC.

According to some of the marketers who spoke to journalists at the weekend, some of these payments were made since 2015 but the marketers are yet to receive supply.

“We have two categories of people whose money has been trapped since last year. One group is the depot owners and other marketers who paid to load direct from the PPMC vessels. I paid over N900 million and PPMC has not refunded the money and has not supplied the product. The second category of the people buy in bulk from the depots that have throughput arrangement with the PPMC. Over 2,000 people paid,” one of the marketers explained on condition of anonymity.

Another marketer who spoke on the issue told journalists that about N35 billion was paid by the marketers for the supply of kerosene alone, while some people also paid for the supply of petrol.

“We had to depend on the NNPC for kerosene and to some extent, petrol because of the challenges of getting foreign exchange. The minister of petroleum tried his best to make dollar available through the international oil companies (IOCs) but the IOCs are no longer giving us at the official price. If you buy dollar above N285, you will not have any margin. That is why the companies relied on the PPMC. About N35 billion was paid by the marketers for kerosene but nobody has been refunded. Now, our banks have swooped on us,” he said.

Journalists also gathered that the next kerosene consignment to be imported from PPMC was yet to arrive Lagos, a week after the vessel was supposed to have arrived.

The 10,000 metric tonne-capacity vessel will be shared by Honeywell, Aiteo and NIPCO Plc.

It was further learnt that over 2,000 people paid to buy the product in bulk while the vessel will contain only about 200 trucks.

While the next consignment is being awaited, the PPMC has since moved up the official price to N135 from N73 per litre.

However, the public who are the end users would not be losing much as the product had always sold above the N73 official price because of racketeering by officials of PPMC and the marketers.

In the massive scam, officials of PPMC allocated the product to marketers at ex-depot price of N73 per litre, while the marketers sold to the public at over N180 per litre.

But some independent marketers, who could not get allocation from the PPMC had alleged that some officials of PPMC collected bribe of N1 million on every truck of kerosene allocated to the marketers at N73 per litre.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Markets

Communities in Delta State Shut OML30 Operates by Heritage Energy Operational Services Ltd

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Oil

The OML30 operated by Heritage Energy Operational Services Limited in Delta State has been shut down by the host communities for failing to meet its obligations to the 112 host communities.

The host communities, led by its Management Committee/President Generals, had accused the company of gross indifference and failure in its obligations to the host communities despite several meetings and calls to ensure a peaceful resolution.

The station with a production capacity of 80,000 barrels per day and eight flow stations operates within the Ughelli area of Delta State.

The host communities specifically accused HEOSL of failure to pay the GMOU fund for the last two years despite mediation by the Delta State Government on May 18, 2020.

Also, the host communities accused HEOSL of ‘total stoppage of scholarship award and payment to host communities since 2016’.

The Chairman, Dr Harrison Oboghor and Secretary, Mr Ibuje Joseph that led the OML30 host communities explained to journalists on Monday that the host communities had resolved not to backpedal until all their demands were met.

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Markets

Crude Oil Recovers from 4 Percent Decline as Joe Biden Wins

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Oil Prices Recover from 4 Percent Decline as Joe Biden Wins

Crude oil prices rose with other financial markets on Monday following a 4 percent decline on Friday.

This was after Joe Biden, the former Vice-President and now the President-elect won the race to the White House.

Global benchmark oil, Brent crude oil, gained $1.06 or 2.7 percent to $40.51 per barrel on Monday while the U.S West Texas Intermediate crude oil gained $1.07 or 2.9 percent to $38.21 per barrel.

On Friday, Brent crude oil declined by 4 percent as global uncertainty surged amid unclear US election and a series of negative comments from President Trump. However, on Saturday when it became clear that Joe Biden has won, global financial markets rebounded in anticipation of additional stimulus given Biden’s position on economic growth and recovery.

Trading this morning has a risk-on flavor, reflecting increasing confidence that Joe Biden will occupy the White House, but the Republican Party will retain control of the Senate,” Michael McCarthy, chief market strategist at CMC Markets in Sydney.

“The outcome is ideal from a market point of view. Neither party controls the Congress, so both trade wars and higher taxes are largely off the agenda.”

The president-elect and his team are now working on mitigating the risk of COVID-19, grow the world’s largest economy by protecting small businesses and the middle class that is the backbone of the American economy.

There will be some repercussions further down the road,” said OCBC’s economist Howie Lee, raising the possibility of lockdowns in the United States under Biden.

“Either you’re crimping energy demand or consumption behavior.”

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Nigeria, Other OPEC Members Oil Revenue to Hit 18 Year Low in 2020

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Revenue of OPEC Members to Drop to 18 Year Low in 2020

The United States Energy Information Administration (EIA) has predicted that the oil revenue of members of the Organisation of the Petroleum Exporting Countries (OPEC) will decline to 18-year low in 2020.

EIA said their combined oil export revenue will plunge to its lowest level since 2002. It proceeded to put a value to the projection by saying members of the oil cartel would earn around $323 billion in net oil export in 2020.

If realised, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues,” it said.

The oil expert based its projection on weak global oil demand and low oil prices because of COVID-19.

It said this coupled with production cuts by OPEC members in recent months will impact net revenue of the cartel in 2020.

It said, “OPEC earned an estimated $595bn in net oil export revenues in 2019, less than half of the estimated record high of $1.2tn, which was earned in 2012.

“Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programmes, and support public services.”

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