Subsidy: NNPC dares marketers over import freeze

Subsidy: NNPC dares marketers over import freeze

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.