N413bn subsidy approval fails to end petrol scarcity

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The petrol supply situation in the country has worsened as marketers say they have yet to receive the N413bn petrol subsidy arrears approved for them by the Federal Government through the Nigerian National Petroleum Corporation last Wednesday.

Some marketers, who spoke with our correspondent on Tuesday, described the announcement as a mere “approval by mouth” without necessary documentary backing.

The situation has negatively impacted loading activities at depots and has also resulted in some filling stations shutting down operations as a result of non-availability of products to dispense to motorists.

Long queues were noticed at filling stations dispensing products, especially petrol, in different parts of Lagos and Ogun states on Tuesday. A similar situation was reported in Oyo State.

The marketers claimed that the announcement of the payment approval was hurriedly made in order to calm tension as a letter from the Petroleum Products Pricing Regulatory Agency to the Debt Management Officer, which is expected to aid the preparation of the Sovereign Debt Notes, had not been prepared at the time of the announcement.

After approval, the DMO, which is under the Ministry of Finance, is expected to send the notes to the Central Bank of Nigeria, where the cash backing is done.

One marketer, who spoke to our correspondent on the development on condition of anonymity, said one week after the N413bn subsidy payment approval was granted, nothing had happened in terms of boosting product supplies.

This, he noted, was mounting pressure on the already stretched petrol supply chain.

According to the source, the marketers are now faced with a major hurdle of processing their import documents, which is the reason why fresh import arrangements cannot be done for the next two or three weeks.

“We are still seriously depending on NNPC products as no marketer has imported petrol for a while now. But the fact that the NNPC is still insisting on the need for the marketers to have bulk purchase agreement with it is also not helping matters,” the marketer explained.

This was also confirmed by the Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, in an interview with our correspondent.

He said the poor supply of products at the depots had resulted in some of the depots charging extra for products dispensed to trucks.

The development, according to him, has made some of the marketers to halt plans to buy petrol, as they will not be able to sell above the N87 official pump price owing to the Department of Petroleum Resources’ threat to shut errant filling stations.

Korodo said, “Although approval has been made but the actual payment of the subsidy arrears is a different ball game. With the way things are at the moment, it will take between three and four weeks for us to have a normalised market.

“As we speak, some marketers are still cautious when it comes to importing products under the subsidy scheme. Government needs to build the confidence of the marketers so that they can fully go back into the business. Otherwise, the scarcity situation may soon become unbearable.”

Two days after the N413bn subsidy payment approval was made, findings by our correspondent had shown that some marketers were hoarding stock.

The marketers, it was learnt, had doubted the government’s move, suspecting it was a ploy to further make them to continue supplying products to the market without getting the expected subsidy.

Oil marketers, for close to a year, have continued to import petroleum products, especially Premium Motor Spirit (otherwise called petrol) without getting refunds from the government as subsidy on the product.

Source: Punch