• Saturday, July 20, 2024
businessday logo

BusinessDay

FG pays N100bn to oil marketers to ease fuel scarcity

president_m

The Federal Government on Tues- day paid N100 billion out of the N185 billion it claimed it owed oil marketers in order to douse the tension caused by the current fuel scarcity. The Debt Management Office (DMO), according to Paul Nwabuikwu of the Ministry of Finance, had issued Sovereign Debt Notes (SDNs) to cover N100 billion agreed upon as balance for the next payment. Nwabuikwu said the central bank had also given approvals for the banks to issue letters of credit.

The present fuel short- age was allegedly caused by a halt in the importation of products due to ongoing delays in the N264 billion subsidy claims to marketers by the government. An oil industry source told BusinessDay that officers of the various oil marketing associations that were involved in the subsidy saga would be meeting with Federal Government today in Abuja. The excruciating fuel scarcity which has almost paralysed the economy, has forced the Nigerian National Petroleum Corporation (NNPC) to take full responsibility for fuel supply. Olufemi Olawore, executive secretary, Major Marketers Association of Nigeria (MOMAN), who was not forthcoming on the move by the government to pay the marketers, yesterday and today, said that if the government paid his members, arrangements would start immediately to bring fuel into the country.

Another chief executive officer of an oil company said the move by government to pay marketers would earn their confidence. Indications are that many of the marketers can currently only service their Lagos based stations and cannot get to the hinterland because of inadequate sup- plies from the NNPC. Again, the independent marketers are left out of the allocation of the product because the NNPC was not sure that they would not sell above the government stipulated price of N87 per litre. The country consumes 40 million litres of PMS daily. Companies like Total and Oando, which have combined shares of 25 percent of the downstream market, are getting far less than what they need for a day from NNPC.

Oando for instance, needs a daily supply of about six million litres per day, but it is currently getting four million litres a week, which is grossly in- adequate. Loading was, however, taking place at the various depots belonging to major oil marketers in Apapa, Lagos, yesterday, when BusinessDay visited some of them. An unwelcome, but familiar sight of lengthy fuel queues sprawled out at many petrol stations across the country leading to widespread panic buying and mass confusion regarding the origins of the scarcity.