STRONG indications emerged last weekend that an estimated 10,000 workers of about 500 NNPC Retail Limited, franchisees outlets across the country may soon lose their jobs over mounting debt profile and other bottlenecks militating against the state oil firm’s ongoing reform initiatives. The NNPC Retail Limited, a subsidiary of NNPC has been overseeing the operations of the franchise retailers since August 2002 at a cost which its current management considers unsustainable in the face of daunting challenges.

Group Managing Director of the NNPC, Dr. Emmanuel Ibe Kachikwu, who gave this hint at a meeting with Energy Editors in Lagos, attributed the impending closure of the franchise outlets to rising debt burden which the parent body can no longer shoulder in the face of its dwindling revenue.

He disclosed that while the franchise holders operate 500 stations, NNPC on the other hand has about 20 stations directly, lamenting that the affiliate stations have continued to enjoy some economies of scale and other benefits from the NNPC which it can no longer sustain.

But as part of plans to prune its operations to reduce cost, the NNPC boss has said it would no more be business as usual.

Kachikwu disclosed that the move had become expedient in the face of the unprofitable nature of the business entity.

He maintained that the corporation could no longer cope carrying on the huge financial burden of the retail outlets to the detriment of other businesses among the NNPC subsidiary companies.

A visibly worried Kachikwu explained that the 500 affiliate stations have consistently failed to pay for products supplied them by NNPC, hence the mounting debt profile, which has made the business unattractive.

“While I ran my own private business, operators made payments to me before products are supplied to them. I don’t need to even wait for their payments. They pay far ahead of supply. But in the case of the affiliate companies, the reverse is the case,’’ he lamented.

He said when he came on board he discovered that a lot of products disappeared along the retail value chain, while there are no attempts to recover some of the debts owed.

He said he has instructed that the credit time lines be reduced because it has been abused by the operators, while product delivery to affiliate stations would henceforth be on cash and carry basis in order to return to profitability.

“For now, we will be returning to our initial 20 fuel stations while we grow capacity gradually. The present affiliate arrangement is not working for the retail company. But we will keep working to come up with other sustainable options to keep the initiative moving,” he said.

But a former GMD of NNPC, Dr. Mohammed Sanusi Barkindo, had said NNPC was targeting 50 per cent ownership of fuel stations.

“In all developing countries, their national oil companies operate across the supply chain, including the strategic downstream sector and it is not only seen from commercial perspective but also from national security implications. You cannot handover that sector to a group of people, private individuals, who you cannot predict their political coloration, decision they may take and the implication of such decision,” Barkindo had said.

Reacting to the decision of NNPC to close the 500 retail outlets, a franchisee who pleaded not to be named for fear of victimisation said the threat by NNPC is good riddance to bad rubbish, insisting that it was the franchisees that are running the business at a loss.

“Despite several requests to the NNPC Retail Limited, the unit in charge of the transaction, for upward increase in profit margins, the management of the corporation is yet to accede to the request.”

He regretted that it had been very difficult to get the NNPC Retail Limited management to discuss final approval of the margin increase, adding that they have been operating at a loss since the partnership started.

If NNPC goes ahead with its decision to shut down about 500 retail outlets, more than 10,000 workers employed of the affected outlets will return to the labour market. decision to shut down about 500

On the way forward, the GMD said the corporation will not be in any rush to sign on affiliates into its retail chain, but would rather take its time to steadily grow the 20 outlets that belong to NNPC.

Barkindo maintained that the move was informed by the determination of the corporation to break the monopoly that currently exists among the marketers who play key roles in the supply chain.

NNPC Retail Limited operations commenced in August 2002 when the first outlet was commissioned in Lagos to market petroleum products to the public.



Read full news here: http://ogudos..com.ng/2015/09/10000-jobs-to-go-as-nnpc-closes-500.html

Bruhhhh. This would be deadly

IssOk

Itz a Ghen Ghen something

This is from a silly blogger trying to attract traffic to his or her site. NNPC officially has 20 retail outlets, others were just affiliate or franchise.

Its like saying, let me put the NNPC tag on my station and let's do business. Then the station owner short changes NNPC by either not remitting or getting the product cheap from NNPC and selling it off at a higher price to other retail outlets. That's why you see most so called NNPC stations do not have petroleum products because the sell them off and pocket the 'profit'.

Mr blogger no job is lost, NNPC will simple remove their label, simple!

It's a good thing, kudos GMD!

Very alarmist article.

First and foremost, the writer assumes that each station employs about 20 persons. Secondly, the writer assumes that if the NNPC pulls off from the stations, then they will automatically stop operations. These were stations owned by independent marketers but merely enjoyed franchise from NNPC.

The New GMD has seen that the licensing of these stations didn't follow due process, and also the distribution of products to these stations is fraught with corruption.

Sai Buhari

OP, you don't know the meaning of affiliate.

The GMD is working hard creating new jobs for Nigerians. I would av thought that helmsman at the NNPC should av re-appraise the situation at the various franchise outlets instead of taking a one swoop decision, we are headed for the brink.

Apc ....change