Fuel Subsidy Payment Brouhaha

Despite the assurance given by the Nigerian National Petroleum Corporation that the country is wet with fuel, oil marketers insist that fuel scarcity looms because of non-payment of fuel subsidy claims to enable them import more fuel into the country

By Anayo Ezugwu  |  Feb. 10, 2014 @ 01:00 GMT

NIGERIA may witness another round of fuel scarcity as a result of the failure of the Petroleum Products Pricing Regulatory Agency, PPPRA, to release the import allocation for the first quarter of the year to oil marketers. The delay by the PPPRA to release the import allocation, according to the marketers, is already putting pressure on the available fuel in stock at the depots owned by the major marketers and they are expected to dry up soon.

Fuel supply is also being threatened by the inability of the federal government to pay the oil marketers more than N220 billion outstanding fuel subsidy claims and accumulated interest in 2013. The Major Oil Marketers Association of Nigeria, MOMAN, said they have not received more than N100 billion main subsidy claims and N20 billion accumulated interest and foreign exchange for fuel imported in the third and fourth quarters of last year. It was also learnt that the federal government still owed the independent marketers under the aegis of the Depot and Petroleum Products Marketers Association of Nigeria and others more than N100 billion subsidy claims for 2013.

The MOMAN has cautioned the federal government over looming fuel scarcity in the country over non-approval of importation allocation of petrol for the first quarter of this year. Obafemi Olawore, executive secretary, MOMAN, said with the current depletion rate in stock level of fuel, if urgent steps awee not taken Nigerians may be thrown into a fresh round of acute fuel shortage. According to him, government should not allow the delayed approval of importation allocation to marketers to degenerate to fuel scarcity when the country is running out of stock.

Andrew Yakubu, GMD, NNPC
Andrew Yakubu, GMD, NNPC

“MOMAN depot at Apapa which controls about 33 percent of national demands has only five days petrol sufficiency, which literarily means, we are gradually running out of stock. As we speak, some three big major oil marketers in the country have totally run out of stock, government should not encourage the situation of allowing only the Pipelines Products and Marketing Company, PPMC, to import fuel. PPMC cannot meet up with the demand of importation Nigeria required and to avoid previous experience on petrol scarcity, government should not entrust importation on PPMC hand,” he said.

Olawore noted that non approval of the first quarter importation allocation by the PPPRA posed a serious threat to all oil marketers. “The downstream is currently on edge and anxiety is mounting among fuel marketers because of the non-release of the approval for first quarter importation.” He stressed that two major marketers had already run out of fuel stock at their respective depots; adding that the remaining four members only had stocks  that would last for five days if not replenished immediately. “It therefore means that there will be fuel scarcity in the country from Friday this week if the major marketers’ supply is not replenished because we account for 60 percent of the national product demand across the country.”

However, the Nigerian National Petroleum Corporation, NNPC, has said that there was product sufficiency, although Olawore said such statements were doubtful. But he admitted that he did not know what the NNPC had on the high sea, but stated that the corporation’s stock on land would not be able to service the entire country adequately. “Point number one; if the NNPC says they have enough, I don’t have any access to their information. So, it may be right or wrong. But what I have access to is the product that is in my tank. As far as I am concerned, they are not even bringing enough to us in Apapa. So, it is not a matter of having enough; although I don’t have access to what they (NNPC) have on the high sea, but on the land, they don’t have enough,” he said.