Petrol in stock can last for 2 months, says FG
Another fuel scarcity is brewing in Nigeria – threatening to cut short the steady fuel supply experienced in the country since the Federal Government increased the pump price of petrol from N86.50 to N145.
The impending scarcity of petrol is being caused by sharp disagreements between the Depot and Petroleum Products Marketers Association (DAPPMA) and the Petroleum Products Pricing Regulatory Agency (PPPRA) over an alleged debt of N660 billion reportedly owed by the Federal Government to them.
According to The Authority the amount comprises N500 billion debt on imported fuel and N160 billion accumulated interest on bank loans.
The oil marketers say the debt is interfering petroleum importation and causing trucks to queue endlessly to load at Dockyard and Apapa depots in Lagos.
DAPPMA declared that the debt will point to the resurgence of fuel scarcity as its members had stopped importing petrol into the country, the PPPRA said this was not true.
DAPPMA Executive Secretary, Mr. Olufemi Adewole, explained that the debt, coupled with the limited foreign exchange, had forced most marketers to stop importing the product. According to him, marketers owe some Nigerian banks over $1 billion in loans for petrol import.
The Federal Government is said to have compounded the situation because it has reneged on its agreement to pay the marketers or the accumulated bank interest on the loans. Right now, “the huge debt owed marketers has eroded our operating fund,” Adewole said.
He said: “We are appealing to government to urgently pay our outstanding debt, which is long overdue. Our banks are threatening to debit our accounts at the current forex rate of N360 per dollar as against the N197 per dollar that government allocated for importation to marketers. This means that we are the ones subsidising the imports.”
According to him, “the inability to pay or service the loans has not only stalled further importation of fuel but is threatening the operations of the affected banks and the nation’s financial industry at large.
“If government fails to address these lingering challenges on price differential, it’s not only marketers that will go down, the banks will also collapse because our exposure with the banks is in excess of $1.95 billion.
“Foreign exchange remains another big challenge. We don’t have forex to import the product. For now, landing cost on petrol stands at over N145 due to high forex rate, which poses serious concern to marketers over the price to sell the product”.
Adewole disclosed that the marketers hesitated to import fuel due to the landing cost (at over N145), stating that most marketers now depend on the Nigerian National Petroleum Corporation (NNPC), which will also determine how much they would sell.
But in a swift reaction, PPPRA stated “unequivocally” that DAPPMA’s claims were “gross misrepresentation of available facts at our disposal, hence misleading.”
The agency said in a statement: “The National Petroleum Products Stock data and import plan currently indicates that the country has two months of PMS sufficiency, hence we want to assure motorists and commuters alike that the products supply situation is robust and able to cater for the fuel needs of all Nigerians, pending when ongoing challenges are addressed.”
PPPRA added that contrary to a widely-held belief on the status of kerosene, the product was fully deregulated.
“We hereby appeal to all Nigerians to remain calm and desist from any form of panic-buying, as we assure of our total commitment to adequate products supply and distribution across the country, in line with our mandate.
“We also appeal to all depot owners to adhere strictly to the subsisting truck-out principle in order to ensure that products get to retail outlets across the country in a seamless manner. The Agency shall not hesitate to apply appropriate sanctions where necessary”.
The NNPC is the only body currently importing the product and has started perfecting plans to import the first batch of petrol for the first quarter of 2017, which would come under the new exchange rate of N305 set by the Federal Government.
Ordinarily, the first quarter importation allocation ought to have been done last month (December) by the PPPRA but that did not happen as the NNPC no longer has competitors in the importation of petroleum products.