Prolong Fuel Scarcity’ caused as ‘Banks Responsible

NIGERIA- The non-cooperation of banks on the account of the debts they are owed by oil marketing companies will prolong the current fuel scarcity. This is in spite of assurances given to the marketers by the Federal Government that it would settled the outstanding payment.

 

This is even as the Petroleum Product and Pricing Regulatory Agency (PPPRA) is alleged to have reduced both the volume and number of marketers it has given licences for fuel importation, for the third quarter of the year.

The action by the PPPRA could not be ascertained as no official of the agency could confirm this development. Phone calls to both the executive secretary of PPPRA and the general manager operations, O. Sidock, were not picked.

The non-settlement of the debt, which ran into about N200 billion, owed oil traders by the government has almost brought the economy to its kneels as they refused to import, but only allowed the Nigerian National Petroleum Corporation (NNPC) to import fuel.

In the last three months, fuel supplies have been epileptic with its attendance high price, which is often above the N87 per a litre. Currently, petrol price ranges from between N100 and N140, depending on which part of the country.

The Major Oil Maketers Association of Nigeria (MOMAN) told BusinessDay that in spite of their desire to import they are being handicapped by the refusal of the banks to grant them loans for import.

Olufemi Olawore, executive secretary, MOMAN, said: “We are doing skeletal importation, even though we would have loved to do more if we have the supports of the banks.”

The banks are being careful of the loans not being paid on time, going by the experience they are currently passing through, he said, saying the marketers had change of mind from their original position that all the money they were being owed must be paid before they could commence import, as some government officials at high level had spoken to them.

Another source close to Depots and Petroleum Products Marketers Association of Nigeria (DAPPMA) lamented the inability of some of its members to secure loans, despite government assurance.

According to the source, out of the over 20 companies that applied to banks for loan, only six are able to scale through because the banks are afraid of default.

The marketers said only a very few of their members were bringing fuel and this would not be enough to go round the country.

Meanwhile, the price of petrol, except for filling stations owned by MOMAN members, still remains between N100 and N140 per litre.

The Department of Petroleum Resources (DPR) recently alleged that oil marketers, especially the depot owners, were creating artificial scarcity by hoarding products and selling at N95 per litre for ex-depot price of petrol, despite getting supplies from the NNPC and also enjoying Petroleum Support Fund (PSF)- subsidy.

The oil and gas regulatory agency accused the marketers of making double gains, as they are paid subsidy from the PSF, just as they have arbitrarily increased the ex-depot prices of petrol which they sell to dealers against the officially approved price by the government.

This has led the oil dealers to sell the product above the regulated price of N87 per litre.

Some of the depots sell petrol to dealers at N95 per litre as ex-depot price, as against government approved price of N77.66 per litre.

The DPR therefore threatened to withdraw the licences of offenders if they did not desist from such practices, saying the action of the depot owners that charge a premium of over N17.34 on a litre over the officially approved ex-depot price was tantamount to defrauding the government and the public, since they all get the subsidy for the products they bring into the country.