Oil Marketers Set For Shotdown With Federal Government on Fuel Supply

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A confrontation that would trigger another round of fuel crisis is currently brewing between oil marketers and the Federal Government, as the marketers have given the government an ultimatum to fully deregulate the downstream sector of the country’s petroleum industry; put a motion in place to increase marketers margin from the sale of Premium Motor Spirit, also known as petrol or risk a collapse of the industry.

In an interview with Vanguard in Abuja, spokesperson for one of oil marketing groups, who chose not be named, claimed that from the present arrangement in the fuel trading business, where the Nigerian National Petroleum Corporation, NNPC, is the sole importer of petrol, oil marketers are currently not making any profit from the sales of the commodity.

Increasing oil marketers’ take, listed as Trader’s Margin in the PMS pricing template would lead to an increase in the price of petrol if other variables were left constant in the template.

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Also, deregulating the downstream petroleum industry, would trigger a rise in fuel price, as the current template of the Petroleum Products Pricing Regulatory Agency, PPPRA, puts the expected open market of PMS at N179.50 per litre, meaning that the government is paying N34.50 as subsidy per litre of petrol.

  • However, when contacted on the impending showdown with marketers, spokesperson for the Nigerian National Petroleum Corporation, NNPC, Mr Samson Makoji, claimed he was in a meeting, and promised to provide the NNPC’s response on the issue at a later time. As at the time of going to press, he was yet to respond.

The spokesperson for the oil marketers further lamented that the newly introduced N50 Point of Sale, POS, charge newly introduced by the government was negatively affecting oil marketers and if not removed, would force many oil marketing companies to close shop.

The spokesperson disclosed that the country enjoyed uninterrupted fuel supply during the Christmas period because oil marketers agreed to work with the Federal Government in that regard.

He said, “Government appealed to us that we should do everything to ensure that there is fuel in December. Again, as I am talking to you, we have listed about three or four items that are still disturbing us.

“One, we are not making any profit, we want them to deregulate or increase our margin. It is either they increase our margin or they deregulate. Two, this N50 POS charge is a killer. No business will survive if it is allowed. Three, the bad roads are not helping us.

“If all these are not addressed; if something is not done, the system will collapse sooner than you think. We are talking to them through government, NNPC and the Petroleum Products Pricing Regulatory Agency, PPPRA, and hoping that individually, they are putting heads together to find the solution to it. There must be a solution to it, like yesterday.”

He added that the Federal Government was yet to fully liquidate its indebtedness to the oil marketers in the area of outstanding fuel subsidy claims, noting, however, that the government had issued the marketers three promissory notes, with the last of the notes to be cashed in by the first quarter of 2020.

He stated that the oil marketers are currently losing about 20 per cent of their claims due to the Federal Government’s style of liquidating the claims.

He disclosed that the oil marketers had decided to follow the path of dialogue in their engagements with the NNPC, a step it had been taking since the appointment of Mele Kyari, as the Group Managing Director of NNPC.

“We are still going to do that until we feel our patients can no longer bear it. If the system pushes all of us out of business, it is at their own peril. We have been talking to them and they seem to be listening to us, and it seems like they would do some of the things we requested,” the spokesperson noted.

Also speaking, Chief of staff of the National President of Independent Petroleum Marketers Association of Nigeria, IPMAN, Mr. James Tor, confirmed that the Federal Government was currently addressing the issue of backlog of fuel subsidy debts owed oil marketers.

He said, “Every effort are on by the Federal Government to pay the backlog of the fuel subsidy debts owed oil marketers. If you have an issue with somebody and the person has started a programme and a plan to address the issue, there is no need of making it an issue again. We are not making subsidy debts an issue again because the government has already arranged a programme for it.

On the issue of uninterrupted fuel supply, Tor said, “We kept in line with the efforts of the President of the country, with his efforts and determination to addressing the challenges in the oil and gas sector.

“He has actually improved on all aspects of the industry, so we advised our members to work in tandem with President Buhari’s policy. We urged all our members to ensure that fuel distribution and supply was in line with Mr President’s efforts and they all kept to it.”

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