A Review of the Nigerian Energy Industry

N120bn unpaid subsidy claim stokes fuel scarcity concern

fuel-subsidy-removal28 January 2014, Abuja — Oil marketers have warned of an impending scarcity of fuel in the country from Friday, noting that their stock was fast depleting.

This followed the failure of the Federal Government to settle their outstanding subsidy claims, totaling about N120 billion for the third and fourth quarters of 2013.

Speaking with newsmen in Lagos, the Executive Secretary of the Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore appealed to the Petroleum Products Pricing Regulatory Agency, PPPRA to release the import allocation for the first quarter of 2014, explaining that its members currently have  45,000 metric tons which is about 60 million litres of fuel left in their storage facilities.

According to him, two of MOMAN’s members have run out of petroleum products, while the remaining four members have stocks that could last for only five days from today if they are not replenished. The major marketers who account for 60 per cent of petroleum products supply in the country are Total, Conoil, Mobil, MRS, Oando and Forte Oil.

He noted that 2013 ended on a very hihg note because some payment was received and products were brought into the country.

He said, “We hoped that the payment will continue but as we speak we are told that the whole thing is being processed and therefore only wish and hope that the process will end pretty soon so that we get payment.

“The last time we met I said we have not received third quarter and fourth quarter has not ended but now it has ended so we now have two quarters, third and fourth quarters pending.

“At this point I want to plead on behalf of other marketers who have been calling me that they have not received their own payment, the interest rate and foreign exchange are a cost element and it is not only the majors that suffer the penalty for default from the banks.

“With the close of 2013, one was expecting that Q1 for 2014 should have been released, knowing fully well that it takes some weeks to book a cargo and for it to arrive Nigerian waters.

“The first month for Q1 2014 has almost ended which means that whatever we are getting now is a fallout from Q4 2013. How long that would last I cannot say because PPPRA usually gives marketers when to bring in products even after the quarter’s allocation.

“For instance, if there are six of you in a quarter, they can tell one of you to bring in for a particular period maybe first week. They try to arrange in such a way that you won’t have people bunching together. It would be spread evenly over the quarter.

“So I like to say that non release of Q1 is making us uncomfortable. Our appeal, therefore, is that it should be released immediately before Q3 import dries out.

“As we speak today and I speak for only the ‘Majors’, in this area we have only about two or three vessels outside for major marketers which is a spillover from last quarter which is about 45,000 metric tons. “This includes two non ‘majors’ in other words for ‘major’ there is only one cargo of 15,000 metric tons.

“We would therefore want to appeal that we should not fall back into the mistake of allowing only Pipeline and Product Marketing Company, PPMC, to import because if we do so, we will get into trouble.

“It is a pity that we give credit to only PPMC, I think credit should go to all of the following: PPMC, PPPRA, MOMAN and the independent importers also constitute another group. All these groups work together to be able to ensure that we have availability all over the country” he enthused.
*Kunle Kalejaye – Vanguard

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