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PPPRA cuts petrol imports by 50%, scarcity worsens

By on March 26, 2015

Four days to the presidential election, long queues of motorists resurfaced in the few filling stations that had petrol to sell in Lagos and Abuja on Tuesday as importers of the product were said to be handicapped by the delay in the payment of their subsidy arrears.

It was gathered that the marketers were holding on for the payment of the balance of their subsidy arrears though the Federal Government recently issued N100bn sovereign debit notes to them out of N185bn owed them.

Our correspondent learnt that the Petroleum Products Pricing Regulatory Agency had cut by half the import allocation permits for petrol from three million metric tonnes in the first quarter to 1.5 million metric tonnes in the second quarter.

The marketing companies were said to have demanded lower allocations due to rising import costs and subsidy arrears. The number of import permits was reduced from 42 in previous quarters to 36 for the second quarter of the year.

The few filling stations on the Apapa-Oshodi Expressway and the Lagos-Ibadan Expressway that had the product to sell on Tuesday had long queues of motorists.

According to an industry source, the marketers are trying to force the government to pay the subsidy arrears before the elections by reducing the volume of import of the product as they are not sure what fate will befall them after the polls.

The Executive Secretary, Depot and Petroleum Products Marketers Association, Mr. Olufemi Adewole, who spoke from Abuja, confirmed that the government had paid the some of the marketers part of the subsidy arrears.

He said, “From our end, what they are owing us is more than what was being owed before. But as long as the government is paying and the banks are supporting us, because the money doesn’t belong to us, there will continue to be products. Right now, there is no cause for alarm.

“Even though there are queues here and there, the explanation we got was that the trucks they sent from Lagos probably had not got here (Abuja).

“On our own side, there is no cause for alarm. We are loading; we are bringing in cargoes and people should keep buying their products normally. The trucks that we sent to Abuja, some have arrived, while some have not. There is no cause for people to panic-buy,” Adewole said.

The Head of Energy Research, Ecobank Capital, Mr. Dolapo Oni, said, “It is still the same issue. The marketers have received Sovereign Debt Notes for the N100bn paid recently but not yet cash. Banks are not eager to extend trade lines to them as most of them are unable to trade out the products through their retail outlets and really depend on the subsidy payment.

“So, a lot of the marketers are not able to still import.”

The Head, Corporate Services, PPPRA, Mr. Lanre Oladele, said in a telephone interview with our correspondent that what was seen in Abuja was “a semblance of scarcity that is artificial.”

He said, “The major problem in Abuja is that some people are hooked on to specific stations. Also, this is election week and more people are buying the products because they want to go home and vote.

“As far as we are concerned, we have done our due diligence by giving them allocation. We gave them first quarter allocation; we gave them supplementary allocation. Now, we have given them second quarter allocation in March. The PPPRA is aware that the Ministry of Finance has paid the marketers.”

Oladele could, however, not confirm the reduction in import allocations.

 

[Punch]