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Oil marketers decry non-payment of N250bn subsidy claims, seek deregulation

By BusinessNews Staff on January 22, 2015

The Major Oil Marketers Association of Nigeria (MOMAN) has decried the non-payment of an outstanding N250 billion subsidy claims for 2014, urging the federal government to pay the bills and deregulate the downstream sector.

Speaking to journalists in Lagos on Tuesday on the recent reduction of the pump price of petrol, the Executive Secretary of MOMAN, Mr. Obafemi Olawore, said the outstanding N250 billion claims include accumulated interest and foreign exchange differentials.

Olawore further disclosed that a directive has been given by the association to members to conform to the directive of the Minster of Petroleum Resources, Mrs. Diezani Alison-Madueke and adjust their pump price from N 97 to N87 per litre.

According to him, about 85 per cent of its members have adjusted their pump price, adding that others will follow suit.

He said the devaluation of the naira contributed significantly to the increase of the pump price in Nigeria, adding that if the naira had not been devalued, the pump price would have come down as in other countries.

Olawore also attributed the high cost of petrol in Nigeria to freight and the state of the refineries.

“We are not against the reduction of pump price to N 87 per litre but government should also increase marketers’ margin of petroleum product. Marketers’ margin has been stagnating since 2007. No Reason was given by the minister for the reduction of the petrol pump price.

Only N 4.60 was given as margin to marketers per litre since 2007 which has not changed. The N10 reduction was on depot price not marketers margin. We meant to believe that in line with Section 6 Clause 1 of the Petroleum Act, that it was the sole responsibility of the Minister of Petroleum to announce that there will be a reduction or increase in the pump price of petroleum,’’ he said.

Olawore, however urged the minister to expedite action on the proposed committees to be set up to look into the complaints of the marketers over margin.

He said the association had agreed with Petroleum Products Pricing Regulatory Agency (PPPRA), Department of Petroleum Resources (DPR), marine inspectors, auditors and the Federal Ministry of Finance to take stock of product in their tanks for adequate payment of subsidy claims.

He, however, argued that reduction of the pump price is not the solution but full deregulation, adding that Olawore said the deregulation of the downstream sector of the oil and gas industry would be the only solution to drive investment and create job opportunities in the sector.

[ThisDay]

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