Marketers Blame N'Assembly for Fuel Crisis

2012-02-24
THISDAY Newspaper- Kunle Akogun

Major and independent fuel marketers Thursday attributed the current scarcity of Premium Motor Spirit (PMS) also known as petrol, in some parts of the country to a drop in the supply of the product following banks’ refusal to provide credit facilities to importers.

This is on the heels of assurances by the Pipelines and Products Marketing Company (PPMC) that there is enough fuel in strategic reserve in the country to last for more than a month.

The marketers, represented by the Major Oil Marketers Association of Nigeria (MOMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN), told the Senate Committee on Petroleum (Downstream) that the current investigation of the fuel subsidy fund management by the two arms of the National Assembly had created panic among the stakeholders, adding that the lawmakers might recommend the withdrawal of subsidy at the end of the probe.

They said because of this anxiety, banks in the country had refused to grant further loans to the marketers to import fuel.

They also told the Senator Magnus Abe-led committee that they had withdrawn from petrol importation for fear that subsidy had been removed and that outstanding debts owed them by the Federal Government might not be refunded.

The Executive Secretary of MOMAN, Mr. Obafemi Olawore, said: “The fear of possible refusal to fund subsidy by government has resulted in the banks’ refusal to finance fuel importation,” adding that as a result, the Nigerian National Petroleum Corporation (NNPC) had been left to solely import petrol, which is grossly inadequate for local consumption.

Olawore, however, informed the committee that the situation had improved following recent pronouncements by the Federal Government that petroleum subsidy had been restored in the 2012 Budget.

As a result of this “green light”, he disclosed that members of MOMAN had placed orders for 180 kilo-tonnes of petrol, which he said, should arrive Nigeria before the end of March.

The MOMAN boss said the NNPC had already released 75 kilo-tonnes of petrol for distribution, stressing that this should mitigate the crisis by next week.

He also appealed for the intervention of the Federal Ministry of Finance to enlist the confidence of banks in the programme; increase the profit margin which had been stagnated at N4.60 per litre since the past five years; and remove undue delay usually caused by administrative bottlenecks and others.

Olawore, who also blamed the Nigerian Navy for the delay in clearing petrol cargoes at the sea ports, also appealed to the appropriate authority in Nigerian Navy to speed up the process of clearing petrol vessels in the port in order to prevent shortage of the product in the country.

Corroborating the submission of MOMAN, President of IPMAN, Alhaji Aminu Abdulkadir, said although hoarding could not be ruled out of the crises, “the scarcity is caused by the shortage in product supply”.

“We are bringing about 120,000 metric tonnes of petrol, but we need the confidence of the banks; if there is drop in one day, it translates to seven to nine days of scarcity,” Abdulkadir said.

He also told the Senate panel that IPMAN lacked the financial muscle to import petrol, so it depends on the NNPC and MOMAN hence “a drop in supplies is fatal to the products distribution in the country”.

“IPMAN has a revolving stock; we cannot hold back because of our massive retail outlets and we have no money to keep stock,” he stated and canvassed an increased profit margin which according to him was overdue.

In his remark, the Director General of the Budget Office, Mr. Bright Okogu, explained that the press briefing conducted last week by the Coordinating Minister of the Economy and Minister of Finance, Mrs. Ngozi Okonjo-Iweala, where she indicated Federal Government’s interest in sustaining the petrol subsidy, was done proactively to forestall the crisis.

He therefore promised meeting with relevant stakeholders to fashion out ways of reassuring the importers to participate in the importation programme.

Earlier, Chairman of the Senate Committee, Senator Abe, expressed worry at the return of long queues at filling stations and explained that the petrol subsidy probe by the National Assembly was aimed at eliminating fraud in the system and not to stop the subsidy.

He also assured the marketers that once the subsidy is provided for in the budget, the National Assembly was favourably disposed to cooperate with the executive.

He asked the Ministry of Finance to convene a meeting next Tuesday for all stakeholders including NNPC, PPMC, Petroleum Products Pricing and Regulatory Agency (PPPRA), bankers and oil importers to find ways of allaying the fears of the stakeholders, saying, “anything we need to do, we should do it immediately.”

Abe said: “I don’t think they should entertain any fear about payment. If there should be any problem, it won’t come from here. You can advise your members to go ahead and conduct their business as usual.”

Meanwhile, the Group General Manager, Public Affairs of NNPC, Dr. Levi Ajuonuma, has quoted the Managing Director of PPMC, Mr. Haruna Momoh, as saying that all issues that led to the initial hitch in petroleum supplies have been resolved.

“There were a number of issues like the Petrol Tanker Drivers’ (PTD) strike in Kwara, Rivers and Edo States which have been resolved. There was also the issue of marketers’ reluctance to import products as a result of the uncertainty about subsidy payment which has also been resolved with the recent appropriation for subsidy included in the 2012 budget by the president.

“So marketers have resumed importation, and we have enough fuel in our strategic reserve to last until their cargoes start arriving,” Momoh was quoted to have said.

Earlier in the week, PPPRA had debunked reports that it had stopped processing subsidy claims from genuine importers.

 

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