International Oil Companies (IOCs) in Nigeria have agreed to provide about $200 million to help fund fuel imports amid a foreign-currency shortage, Petroleum Minister of State Emmanuel Kachikwu said.

“I have been able to convince the upstream oil companies to provide foreign exchange buffers over the next one year for those who’re bringing in products,” Kachikwu said in video posted on his Facebook page on Thursday.

Total SA and Exxon Mobil Corp. will provide dollars to their local retails units, Total Nigeria Plc and Mobil Oil Nigeria Plc, while Royal Dutch Shell Plc has been paired with local oil importer Conoil Plc and Eni SpA with Oando Plc, said Kachikwu.

Companies importing fuel in Nigeria have been hindered by lack of access to foreign exchange, following the plunge in the price of oil, the main foreign income earner in Africa’s largest oil exporter. This has resulted in widespread supply shortages across the country of about 180 million people, that state-owned Nigerian National Petroleum Corp., or NNPC, has been unable to address, Kachikwu said.

Nigeria imports about 70 percent of its refined-fuel needs, after decades of poor maintenance and mismanagement left four state-owned refineries working at a fraction of their 445,000 barrels per day capacity.

Royal Dutch Shell, Total, Eni, Chevron Corp. and Exxon Mobil Corp. run joint ventures with the NNPC that pump about 80 percent of Nigeria’s crude. Shell officials in Lagos declined to comment, while spokespeople at Chevron, Exxon, Total and Eni didn’t immediately respond to requests for comment.

Getting the upstream companies to intervene and matching them to downstream business lines for the provision of foreign exchange is an “ingenious move,” said Oyeyemi Oke, senior associate of energy and projects at Lagos-based law firm Templars.

“Although a short-term strategy, it would mitigate the current challenges faced by major marketers with regards to access to foreign exchange,” he said. “That said, a long-term solution to ensure availability of petroleum products should be put in place,” including ensuring existing refineries are operating at full capacity and new facilities are built, and liberalising access to foreign exchange, he said.

With the backing of President Muhammadu Buhari, the Central Bank has pegged the naira at 197 to 199 a dollar since last year, through capital controls and import restrictions.

The oil ministry has been in talks with the Central Bank to make a special foreign-currency allocation for fuel importers, Kachikwu said.

“I’ve had to box my way through the Central Bank of Nigeria to get a little bit more allocation because we provide the bulk of this foreign exchange; we should have a bit of it to help stabilise the fuel situation,” he said.

http://www.financialwatchngr.com/2016/04/08/iocs-give-200-million-fuel-imports/

Watching in 3D...

Clearly the country is broke

idupaul:
Clearly the country is broke

People like you. Are suppose to write Aptitude text before allowing you access on Nairaland.

Did you see anywere they said the country is broke?

When somebody like you attempt jamb 5 times anD you still don't make it, you start blaming your step mother wereas, the problem lies with you and that is the inability to read and comprehend.

Its a pity.

GudluckIBB:


People like you. Are suppose to write Aptitude text before allowing you access on Nairaland.

Did you see anywere they said the country is broke?

When somebody like you attempt jamb 5 times anD you still don't make it, you start blaming your step mother wereas, the problem lies with you and that is the inability to read and comprehend.

Its a pity.

u left ur brain some where before typing this?

GudluckIBB:


People like you. Are suppose to write Aptitude text before allowing you access on Nairaland.

Did you see anywere they said the country is broke?

When somebody like you attempt jamb 5 times anD you still don't make it, you start blaming your step mother wereas, the problem lies with you and that is the inability to read and comprehend.

Its a pity.

Do they need to write that before you know ..the country can't spare 200 million dollars to finance fuel imports and it has to beg private IOCS to help them fund It and you think they are are not broke

If we need to use the likes of Dasuki, Saraki, n Dokpesi as collateral to buy oil, then let the FG go ahead with it . . . Afterall na our money.

Whatever happened to the over $350 billion recovered from corruption by this administration?