Enlightment

Fuel scarcity looms as FG owes oil marketers $1.7bn

The country may be plunged into another round of excruciating fuel scarcity in the next couple of weeks, as oil marketers disclosed that they are running out of patience over the Federal Government’s refusal to pay its $1.7 billion debt owed oil marketers since May 2015. One of the oil marketers, who spoke to Vanguard in Abuja under the condition anonymity, disclosed that the seeming sanity in petroleum products distribution and sales across the country can be likened to the, “peace of the graveyard,’ as he noted that marketers are only ensuring that they are not seen as individuals seeking to sabotage the efforts of government. He stated that the marketers had written series of letters over their predicaments to the Presidency and that the Presidency had agreed to grant them audience, while he warned, however, that if nothing is done to address the issue of the debts owed them, they would be forced to take drastic measures that might lead to the return of another fuel crisis. He explained that the amount owed the marketers was for foreign exchange differentials owed both major oil marketers, independent oil marketers and other petroleum marketers. He said the amount was the balance from the payments made by the Goodluck Jonathan administration, before handing over to President Muhammadu Buhari, while the rest was incurred in May 2016, when the Federal Government devalued the naira. According to the source, major oil marketers are owed about $500 million, while independents, depot and petroleum products marketers were owed about $1.2 billion. The source also confirmed that some of the oil marketers are indebted to the government, stating, however, that their indebtedness pales in comparison to the huge debt the Federal Government owes the oil marketers. He further stated that the oil marketers’ indebtedness to the country was more recent, while the Federal Government’s debts dated back to May 2015. “Irrespective of the fact that our own debt is recent, very small and insignificant, compared to the amount the Federal Government owes us, the government is asking us to pay, while nothing is said about their own debt which is huge and dates back to 2015,” he said. He noted that as a result of the huge debts, majority of the oil marketers had sacked a large number of their staff, as many of them are finding it extremely difficult to pay staff salaries and even sustain their operations, as a result of the unfavourable operating environment. He added that the oil marketers are currently at loggerheads with a subsidiary of the NNPC, the Pipeline and Products Marketing Company, PPMC, over the introduction of obnoxious rules that are detrimental to existing contractual obligations, without proper consultations with oil marketers and other stakeholders. He also disclosed that majority of the oil marketers had since stopped the importation of Premium Motor Spirit, PMS, also known as petrol, while he confirmed that the NNPC is currently the major importer and has enough stocks of the commodity on ground to guarantee several months of supply. However, he said, “While I can tell you that the NNPC has adequate quantity of the product to last the country for months, we the oil marketers have agreed that we cannot continue to allow the NNPC to supply its products to Nigerians through our facilities, both depots and retail outlets, while nothing is done to address the debts owed us. “We might be forced to stop the NNPC from using our facilities; then let us see how the NNPC can supply its millions of litres of PMS to the public. It is a known fact that the NNPC cannot supply its products to the public without using the facilities of oil marketers. Confirming the development, the NNPC, in its latest Monthly Financial and Operational Report for September 2016 released recently, disclosed that as regards downstream sector, NNPC remains the major importer of petroleum sector. This, according to the NNPC, was despite the liberalized price regime due to inaccessibility of foreign exchange (FOREX). However, it stated that the “FOREX intervention by the international oil companies (IOCs) cushions the effect. Also, the ongoing Turn around Maintenance (TAM) is promising to entirely change the anemic outlook of the country’s refineries.”

Sahara Weekly

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