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Alison-Madueke meets marketers in Lagos to avert fuel crisis

By BusinessNews Staff on February 25, 2015

In a move to avert a looming scarcity of petroleum products in the country, the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, on Monday met with the Chief Executive Officers of Oil Marketing and Trading (OM and T) companies in Lagos.

The protracted meeting, it was learnt, which lasted from noon till late in the evening was held at the Eko Hotel behind closed doors to find solutions to the threats by the banks and marketers to stop financing and importing products, respectively.

THISDAY gathered that the minister convened the meeting to plead with the marketers and other importers of petroleum products to sheathe swords on their plan to stop importation of products over unpaid subsidy claims.

Though it was agreed at the meeting that the issues discussed should not be made known to the media, a source privy to the meeting told THISDAY last night that the minister pleaded with the marketers not to stop importation as scarcity of fuel few weeks to the general election would worsen the already charged political atmosphere.

“She pleaded with us to exercise patience because of the elections. She said any scarcity at this critical period would not be in the best interest of this present administration. She also promised to do everything within her powers to address the issues raised by the marketers,” the source said.

THISDAY also gathered that the marketers were aggrieved over unpaid subsidy claims, non-payment of interest on delayed claims and huge differentials in the exchange rate.

According to the marketers, the recent devaluation of the naira has effectively eroded the capacity of the marketers to import products at the prevailing official rate.

While the Petroleum Products Pricing Regulatory Agency (PPPRA)’s official exchange rate, according to the pricing template released on February 20 is N199 per dollar, the marketers complain that they pay as much as N210 per dollar to import products.

The marketers are also insisting that the federal government should pay all the interest on subsidy claims that remained outstanding beyond the 45 days stipulated in the subsidy guidelines.

Under the Petroleum Support Fund (PSF) scheme, the PPPRA issues Sovereign Debt Instruments (SDIs) to marketers, whose imported products have been verified by the relevant agencies of government.

The marketers will in turn present their SDIs to the Federal Ministry of Finance, where they will be issued with Sovereign Debt Notes (SDNs), which are regarded as being equivalent to cash.

It is the SDNs that the marketers will present to the Central Bank of Nigeria (CBN) to collect the cash equivalent.

However, while the Federal Ministry of Petroleum Resources, through the PPPRA, will always claim that it has verified all import claims and forwarded to the Federal Ministry of Finance for payment, the ministry of finance, on the other hand, always insists that they have also issued SDNs to the marketers, hence the subsidy claims are deemed to have been paid.

But the marketers argue that even though the SDNs are supposed to be as good as cash, they still find it very difficult to get the real cash payment, each time they present the instruments to the CBN for payment, causing delays of over three or four months.

[ThisDay]

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