A Review of the Nigerian Energy Industry

NLC, NUPENG protest as fuel shortage worsens

01 May 2015, Lagos – Members of the Nigeria Labour Congress and the Nigeria Union of Petroleum and Natural Gas Workers staged a protest in Lagos on Thursday against the lingering problems in the oil sector, which had resulted in the scarcity of petrol nationwide.

The protesters, who marched through Ikorodu Road from Jibowu down to Maryland, called on the Present-elect, Maj.-Gen. Muhammadu Buhari (retd.), to look into oil sector and nullify all contracts with the Niger Delta militants to protect pipelines across the country.

They also warned against the removal of fuel subsidies as being canvassed in some quarters.

Despite Wednesday’s announcement by the Federal Government to commence the payment of fuel subsidy arrears being owed petroleum product marketers on Thursday, there was little hope that the current nationwide scarcity of petrol would abate any time soon.

The Major Oil Marketers Association of Nigeria and Depot and Petroleum Products Marketers Association could not readily confirm if the government had fulfilled its promise to pay them N156bn out of the N356.2bn being owed their members, describing the amount as insufficient.

The Executive Secretary, MOMAN, Mr. Thomas Olawore, told one of our correspondents on Thursday that he could not confirm if the marketers had begun to receive alerts of payment or not.

Olawore said, “The government said it would pay N156bn out of N356.2bn and we are left with a balance of N200.2bn. What happens to the N200.2bn?

“That is why we are requesting that the government invites us so that we can be told how it intends to liquidate the remaining N200.2bn.”

He insisted that marketers had not stopped the importation of petrol, explaining that even though there were vessels carrying petrol berthing at the ports, the product could not be conveyed to filling stations because the transporters had refused to lift products as a result of the debts owed them by the marketers.

Olawore confirmed that the capacity of the marketers to import products had drastically reduced due to the huge subsidy arrears owed them by the government.

He said, “Vessels have been coming. They have never stopped coming. We have not run out of stock and we have not stopped importing. It is just that transporters have refused to lift products; and that is the problem.

“We have our issues with the government because our subsidy arrears have not been paid, and transporters also have issues with us because we are owing them. We can only pay transporters when the government pays us our subsidy arrears.”

Transporters of petroleum products are said to be owed N20bn by the marketers, although our correspondents gathered that the amount had not been reconciled by the two parties.

Olawore said, “They are owing us over N350bn and they are only paying N154bn. We need to know the programme for the payment of the balance, which is higher than what they are paying us.

“But nobody is talking to us. The government has not engaged us. The people that can make payment have not engaged us. We have been talking with the PPPRA, but we need to talk to people who are in charge of making the payment.”

The Chairman, NUPENG, Lagos Zone, Alhaji Tokunbo Korodo, said the union would be forced to embark on a solidarity strike action if the petrol tanker drivers were not paid their salaries.

He said, “The major marketers claim that the Federal Government is owing them and they also threaten that they are not going to pay tanker drivers; what do you expect? We can’t just fold our arms and allow our members work for 30 days and are denied their salaries. It is uncalled for.

“My passionate appeal to the outgoing government is to urgently look into the treasure and pay the aggrieved marketers if truly it believes that it owes them. Part payment will not solve this problem. These people will collect the part payment, but after that, they will still agitate for the balance.”

Also on Thursday, the Federal Government said it had paid the oil marketers N500bn in the last five months as fuel subsidy claims.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, disclosed this in a statement issued by her Special Adviser on Communications, Mr. Paul Nwabuikwu.

Giving the breakdown of the payments so far made as fuel subsidy, Okonjo-Iweala said the government had in December 2014 paid the sum of N350bn to the marketers, noting that additional N31bn in foreign exchange differentials had already been released.

She said the Federal Government’s commitment to prioritise payment to marketers in spite of revenue constraints had now made the Finance ministry to release the sum of N156bn to them.

The statement read in part, “In line with the Federal Government’s commitment to prioritise payment to marketers in spite of revenue constraints, the Federal Ministry of Finance has paid the sum of N156bn to oil marketers.

“The payment has two components. The first consists of the cash backing of the N100bn IOU, which the marketers were given in March. The second is N56bn in interest payments for the marketers according to the PPPRA template.”

“This leaves a balance of N98bn certified by the PPPRA as the amount owed the marketers. The N156bn is the latest in a series of significant payments made to the oil marketers within the last five months.

“These include over N300bn in two instalments in December last year and N31bn in interest differentials recently. In all, oil marketers have received over N500bn within the past five months.”

The minister urged the marketers to appreciate the efforts being made by the Federal Government to meet up with their payments and reciprocate with some understanding of the situation of Nigerians who should not suffer more.

Okonjo-Iweala urged the marketers to sustain the distribution and supply of petroleum products in order to end the suffering of Nigerians at filling stations.

She added, “The Federal Government has made maximum effort, in spite of the well-known fact that the fall in oil prices has significantly reduced national revenues, to prioritise payments to the marketers.

“For the sake of Nigerians, who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and cooperation in which we have always tried to engage them.”

– Punch

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