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Petrol scarcity resurfaces as marketers cut imports

By BusinessNews Staff on March 20, 2015

A week after queues of desperate motorists disappeared from filling stations, the nation is in for another round of fuel scarcity as marketers have significantly because they are unsure of the continued payment of subsidy on the product after the general elections.

Findings by our correspondent showed that major oil marketers, who import a large chunk of petrol consumed locally, were stalling on further importation of the product and not ready to tie their money down owing to fears that power could change hands after the general elections.

The marketers, our correspondent learnt, were keen about minimising losses, which could occur as a result of developments in the political arena; hence the return of queues at filling stations in Lagos, Abuja and other major cities in the past three days.

In Lagos, some filling stations were shut on Wednesday as their owners claimed they were not getting supplies from the depots.

The Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, told our correspondent in a telephone interview that there was no reason why queues should resurface at the filling stations any time soon because of the recent intervention of the Federal Government.

But he admitted that the current political situation in the country, especially uncertainties surrounding the forthcoming general elections, had become worrisome to the marketers.

Korodo said the marketers were currently taking actions to check possible losses that could affect their businesses, and were unwilling to go all out to import products.

He described the current petrol supply situation as artificial, saying the recent stoppage of importation by the major marketers could also be working against a perfect market situation.

“The effects of the shortage in supply, which caused the last scarcity, are still there. Some of the gaps are yet to be filled,” he added.

A member of the Depot and Petroleum Products Marketers Association, who spoke to our correspondent in confidence, said the supply of petrol had not been sustained in recent times.

The marketer said the move by the Nigerian National Petroleum Corporation to bring in products when scarcity hit the market in the past week was cosmetic, adding that major marketers had yet to fully come on board to fortify supply.

The source also raised the alarm that products hitherto brought in by the NNPC were drying up without substantial replenishment.

Meanwhile, some filling stations in Lagos are now selling petrol for N100 and above per litre instead of the official pump price of N87.

Aside Lagos, it was also gathered that most filling stations in other states of the federation were ignoring the Department of Petroleum Resources’ directive that petrol must be sold for N87 per litre.

The Federal Government had on March 3 this year said that a Sovereign Debt Note of N100bn had been issued by the Debt Management Office to settle part of the subsidy arrears owed the marketers.

The Minister of Finance, Dr. Ngozi Okonjo-Iweala, confirmed the issuance of the SDN through a statement issued by her Special Adviser on Communications, Mr. Paul Nwabuikwu.

The minister had sympathised with Nigerians whose lives were being disrupted by the scarcity of petrol and said the government was working hard to end the scarcity within the shortest time possible.

Specifically, she said an agreement had been reached with the marketers’ union that N100bn out of the outstanding N185bn subsidy debt be paid.

The minister said as part of the agreement, the government would not only pay the extra costs that the marketers had incurred, but also the interests and foreign exchange differentials.

In order to facilitate the payment, the minister said the Central Bank of Nigeria had given approvals for banks to issue letters of credit to the oil marketers.

[Punch]

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