NNPC pipeline...now at the mercy of vandals whose activities have been blamed for the current fuel scarcity

BY Festus Akanbi

Strong indications emerged at the weekend that the current fuel scarcity and attendant price hike may linger for some time as the Nigerian National Petroleum Corporation (NNPC) vowed not to commence the repair of the damaged pipeline in Arepo, Ogun State until the safety of its personnel is guaranteed by security agencies.

The damage of the pipeline at Arepo and the delay in settling the subsidy claims of some marketers, which has forced them to reduce importation, have been cited as responsible for the current fuel scarcity.

The General Manager, Media Relations of NNPC, Dr. Omar Ibrahim, had early last month expressed the readiness of the corporation’s engineers to return to the site of the pipeline vandalism for a quick repair in view of the difficulty in distributing the products in the affected areas. 

But in his response to THISDAY enquiries on the need to ensure a quick repair of the damaged pipeline in view of the current challenges posed by poor fuel distribution, the Acting Group General Manager, Group Public Affairs of NNPC, Fidel Pepple, said he could not say exactly when the current difficulty in fuel distribution would end because the corporation was not prepared to send its personnel to Arepo until the security agencies were able to guarantee their safety.

“The management of NNPC has resolved not to risk the lives of its personnel by sending them to Arepo until their safety is guaranteed,” he told THISDAY.
Ibrahim had four weeks ago raised the prospect of NNPC engineers returning to the site to fix the pipeline, saying the corporation had already met with the leadership of the Special Task Force on Anti-pipeline Vandalism set up by the Inspector -General of Police to ensure adequate security for NNPC officials.

He said the task force recently arrested six suspects in connection with the vandalism and expressed optimism that more arrests would soon be made.

However, industry watchers said now that the corporation has developed cold feet over the repairs of the damaged pipeline, early resolution of the crisis on fuel distribution might not be in the offing.

Some yet-to-be-identified vandals had in August punctured the Arepo pipeline, which carries between 10 million litres and 11 million litres of fuel per day to Lagos and its environs and some states in the northern part of the country.

The vandalism of the pipeline led to huge disruption in the supply chain and shortage in fuel supply to most parts of the country.
The development prompted NNPC to increase the use of trucks to cushion the effect of the damage on supplies, pending the completion of repairs at the site.

However, some officials of the Petroleum Products Marketing Company (PPMC), a subsidiary of NNPC, sent to repair the pipeline were recently attacked by hoodlums at the site. Three workers were reportedly killed by the vandals, prompting NNPC’s resolve not to return to the site unless their security is guaranteed.

The current fuel crisis had been blamed on the shortfall created by the vandalism of the NNPC pipeline in Arepo and the failure of some fuel importers to engage in fuel importation.

Some marketers had complained that banks are beginning to shut their doors against them in terms of lending.
However, speaking with THISDAY last week, Managing Director, Ecobank Nigeria Plc Jibril Aku said no one should expect banks to fund a business when earlier facility hasn’t been redeemed.

According to him, there are two categories of fuel importers who do business with Nigerian banks.
He explained that the first group consists of those handling products that are subsidised.
Aku said banks expect importers to redeem their debts as quickly as possible but that in a situation where an importer is unable to repay the loan, then it creates problem for the bank.

Banks, he said, no longer want to increase their non-performing loan portfolio.
The second category, he explained, consists of importers of fuel not under subsidy list.
He maintained that importers of diesel and kerosene are not finding it difficult to access loans in banks because nobody is waiting for any payment from the government.

He noted that banks have learnt their lesson, adding that none of the banks is ready to carry unnecessary burden having succeeded in reducing their non-performing loan ratio significantly.

Industry watchers said the hard stance of banks on credit facility to fuel importers and the unfavourable security situation in Arepo may prolong the current fuel crisis.