A Review of the Nigerian Energy Industry

Subsidy: Oil marketers optimistic govt will pay up

Kunle Kalejaye 02 September 2015, Sweetcrude, Lagos – Petroleum products marketers in Nigeria’s downstream oil sub-sector are optimistic that their subsidy refunds and interests accumulated under ex-President Goodluck Jonathan government would be paid by the Federal Government soon.

IPMAN-fuel pumpTheir belief is that once the government is through with verification of their claims, payment would be made to them.
‎Chairman, Platinum Alliance, an oil and gas consultancy firm, Sir Uche Iheakanwa, claimed that payment would be made soon.
‎”Fuel subsidy will be paid soon after regulatory verification and even before the appointment of ministers, especially that of Finance whose responsibility it is to fund that account,” Iheakanwa said.
The actual subsidy figure for payment to marketers is, however, yet to be verified, but Iheakanwa noted that government believes that the regulated price of downstream products must be maintained to forestall any additional hardship imposed on citizens.
“This is the reason why DPR (Department of Petroleum Resources) and other agencies have been resilient in tackling those who may want to cheat and still collect subsidy. Despite all the challenges, suppliers still believe in the government as the administration has not given anyone reason to doubt,” Iheakanwa said.
Meanwhile, despite the none payment of fuel subsidy to legitimate marketers, it has been observed that supply of petrol ‎across the country has improved and prices have returned to official regulated price of 87 per litre.
Explaining the magic behind the improved supply of petrol in the country, Chairman/Managing Director of Mobil Oil Nigeria Plc, Mr. Tunji Oyebanji, said the change in government was one of the reasons.
Oyebanji said banks are now flexible to grant marketers fund to import petroleum products.
“Marketers did not hold the nation to ransom when there was scarcity of the product. We are yet to be paid but the reason why the product is available is that the refineries are now working, NNPC has brought in more products,” Oyebanji said.
Commenting on the status of the refineries, Oyebanji said their technologies are obsolete, hence they cannot operate beyond 60 percent capacity.
He explained that it was government decision to deregulate the downstream sector, noting that the ‎cost of transporting crude to the refineries in trucks was not sustainable.
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