Major Oil Companies Fund Nigeria's $200 Million Fuel Imports
To sustain the fuel and currency deficiency in Nigeria, four major oil companies agreed to provide foreign exchange valued at $200 million to fund fuel imports. These major companies to provide funds are Eni SpA, Exxon Mobil, Shell and Total.
According to Minister of State for Petroleum Resources, Ibe Kachikwu, Exxon Mobil Corp. will be the one to provide dollars to their local units, Mobil Oil Nigeria Plc and Total Nigeria Plc. Royal Dutch Shell Plc on the other hand will be paired with local importers, while Eni SpA and Conoil Plc with Oando Plc., Vanguard reports.
Nigeria's President Muhammadu Buhari appointed Kachikwu after relieving the NNPC board last year to reconstruct the company whose ambiguous structure have enabled corruption and oil theft to prosper.
"I have 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 stabilize the fuel situation," he said.
Africa's leading oil producer needs to import most of its fuel needs is in distress from hard currency deficiency because of the decline in vital oil revenues. It already had talks with Chevron, Total and Eni to get support reconstructing its refineries as motorists have been queuing at petrol stations for weeks, based on Reuters Africa report.
Companies that import fuel in Nigeria have been curbed by lack of access to foreign exchange following the decline in oil price, which is the major foreign income earner in Africa's largest oil exporter. This results in the expansive supply shortages throughout the country of almost 180 million people that the government-owned Nigerian National Petroleum Corp. or NNPC was not able to handle, as reported by Bloomberg.
The country imports about 70% of its refined oil after years of poor maintenance and mismanagement left four government-owned refineries works at a fraction with a capacity 445,000 barrels a day. With the support of President Muhammadu Buhari the central bank has kept the naira at 197 to 199 a dollar since last year with import restrictions and capital controls.