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Subsidy: NNPC dares marketers over import freeze

By on April 22, 2015

The Nigerian National Petroleum Corporation has said it will not be distracted by the threat of major petroleum products’ marketers to stop importing Premium Motor Spirit this week if the subsidy arrears owed them by the Federal Government are not paid.

The NNPC said it had enough products to service the entire country and was not moved by the marketers’ threat.

The position of the corporation was made known by the Group General Manager, Group Public Affairs Division, NNPC, Mr. Ohi Alegbe, in a telephone interview with our correspondent.

Alegbe said the corporation was committed to ensuring that there was a smooth handover of power from the incumbent government of President Goodluck Jonathan to the President-elect, Maj.-Gen. Muhammadu Buhari, and judging by the stock of product currently controlled by the Pipelines and Products Marketing Company, a subsidiary of the NNPC, there was enough PMS to last beyond May 29.

He said the corporation would not allow product supply issues to mar the handover as it remained committed to importing adequate quantity of PMS to ease movement and economic activities nationwide.

Last week, some marketers had decried the government’s inability to disburse the outstanding payments due to them for the importation of PMS under the Petroleum Subsidy Fund Scheme, warning that the continuous delay in the payment could lead to another round of fuel scarcity if not promptly resolved.

The Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Thomas Olawore, in a document made available to our correspondent, warned that the marketers, whom he said were currently experiencing “commercial hardship” as a result of cash flow constraints caused by the delayed payment and compounded by the devaluation of the naira, higher inflation and increase in lending rates, might withdraw their services if the impasse was not resolved.

The consequences of their action, he explained, would include a significant scale down in petroleum products’ supply, adding that MOMAN members were being left with no other option but to streamline overhead costs and workforce in the very immediate future.

MOMAN pleaded with the Minister of Finance to quickly intervene as the “next five working days are crucial to members’ capacity to continue to operate.”

But Alegbe told our correspondent that the corporation was importing more products, and in order to gain penetration into all the nooks and crannies of the country, was allocating products to independent petroleum products’ marketers.

Commenting on the possibility of some independent marketers hoarding and/or diverting products, he said that could only happen in the past as the NNPC had put machineries in place, including personnel and facilities, to monitor the movement and distribution of petroleum products.

The NNPC had also threatened to sanction marketers who were hoarding and diverting petrol, noting that a special monitoring team had been deployed to check incidents of product diversion by “some unscrupulous marketers and ensure that appropriate sanctions are brought to bear on perpetrators of such unpatriotic acts.”

Similarly, the management of the Petroleum Products Pricing Regulatory Agency had also assured the citizens of steady supply of petroleum products across the country.

As of March 1 this year, the Federal Government was said to be spending over N1.380bn as subsidy on petrol daily.

The PPPRA had put the product cost and freight elements of imported PMS at N94.46; with other cost items like traders’ margin, lightering expenses, NPA, financing, jetty depot through put charge, and storage charge put at N1.48, N4.16, N0.78, N1.34, N0.80 and N3.00, respectively.

 

[Punch]

One Comment

  1. Proud Yoruba

    April 22, 2015 at 4:00 pm

    So what is wrong with paying people if you owe them, you don’t only want to destroy Nigerian economy, you want to destroy nascent businesses too!