Oil Marketers Demand Full Payment for Outstanding Petrol Equalisation Arrears


June 16,2023.

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Petrol marketers, under the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), have demanded full payment of arrears owed by the federal government under the now defunct Petroleum Equalisation Fund (PEF) arrangement.

The demand came as Crude Oil Refinery Owners Association of Nigeria (CORAN ), yesterday, urged the Central Bank of Nigeria (CBN) to create an intervention fund for modular refinery companies in Nigeria, same way it did for the Dangote refinery.

Speaking during a press briefing in Abuja, National President of NOGASA, Mr. Bennett Korie, noted that without offsetting the huge debts running into billions of naira, it would be almost impossible for marketers to get new stock.

Korie said with the new dynamics in the downstream, members would need to spend as much as N25 million, for instance, to purchase a 45,000-litre truck of petrol, which cost them N7 million previously.

Before the removal of fuel subsidy by President Bola Tinubu, the equalisation fund ensured uniformity of petroleum products pricing nationwide. The federal government would thereafter reimburse the marketers.

But the NOGASA president stated that debts owed his members had made it impossible for them to return to the market, given the huge price differential.

While pledging the support of the association to the subsidy removal directive, Korie explained that there were problems associated with the policy, which must be sorted out.

According to the NOGASA president, “We are 100 per cent in support of subsidy removal. But you know that they don’t talk about the problem behind the subsidy removal. It is good to remove subsidy, but there are things that people don’t know. For instance, some of the marketers don’t have the money to pay differentials.

“This is because in less than an hour that Mr. President announced the removal of subsidy, the price changed and that affected a lot of marketers.

“We are talking about millions of naira. Before the removal, a tanker of fuel was selling for about N7 million, but in less than an hour, it went up to N25 million.

“Where are they (marketers) going to get this money? Banks are giving loans at 30 per cent interest, so where is this money going to come from? That is a fresh problem that nobody is talking about. Subsidy was removed without considering some of these problems.”

Korie urged the federal government to pay marketers their outstanding of the fund to boost members’ capital and enable them stay in business.

On the issue of bad roads, which negatively impacted the operations in the downstream petroleum sector, the NOGASA president stated that the situation was making it difficult for investors to do business

He said, “Again, the issue of roads is another big problem that we are facing. Last year, I spoke about this road. Today, the problem is still there. I am not saying that government is not trying. But some of these roads are very bad. We are losing products.

“So, if you remove subsidy, use that money to fix the roads. It is important, not just to remove subsidy, but also to make it easy for us to do this business. Pay the PEF, fix the road.”

Korie noted that the marketers were literally working for the banks, with interest rate soaring.

He said, “Marketers are working for the banks. Where are they going to get the N13 million differential to pay the Nigerian National Petroleum Company Limited (NNPC).

Korie stated that it was only fair to allow marketers load products at the old price, which they paid upfront.

“I also want to use this opportunity to appeal to NNPC to note the marketers paid three months upfront for the products before this subsidy removal,” he stressed, explaining that the high price of diesel is also negatively affecting the price of petrol.

Korie told the federal government, “Allow us to load our products at the price we paid before the removal of subsidy, because we are expected to load when we pay. Now we paid upfront, so, allow us to load our products at the old price.

“Removing subsidy is not the problem, but it will hurt us. We are the traders; we are the ones bringing the product to the stations, give us that chance to load our products.

“We are also hammering on the issue of diesel cost. If diesel is high, expect petrol to be high. The only way out is to give priority to diesel, because that is what everybody uses for industry, construction companies and others.”

According to him, because of the nature of the business in Nigeria, tankers, which supply all the regions are fuelled with diesel oil that also now has its price skyrocketing.

He said, “Even the transport, it is diesel that you will use. So, priority should be given to diesel. Tell the Central Bank of Nigeria (CBN) to give priority to diesel importation, not just petrol. It is very important because when it is cheap, it will also make the petrol price go down.

“We want the price of petrol to go down. That price is not fair to Nigerians. If we want to lower the price, we must bring down the price of diesel. It will also help the economy, not just on subsidy removal.”

Crude Oil Refiners Back Subsidy Removal, Seek CBN’s Intervention for Modular Refineries

Meanwhile, CORAN urged the CBN to create an intervention fund for modular refinery companies in Nigeria, as it did for the Dangote refinery.

The association threw its weight behind the recent removal of petrol subsidy, which it said would save the country huge amount of resources and open a new vista for economic growth. The body said the country’s local currency should be used in purchasing crude by modular refineries.

In a statement signed by Chairman, Executive Committee of CORAN, Mr Momoh Oyarekhua, and Secretary, Olusegun Ilori, the group further urged the government to resolve the problems of crude supply uncertainty and removal of bureaucratic bottlenecks.

The association said, “A critical necessity at this time is for the CBN to create a window of intervention fund, such as was given to Dangote, to other modular refinery companies to access financial support to complete their projects.

“The problem of guaranteed supply of crude to the refineries with naira payments, guaranteed off-take of the products and removal of bureaucratic bottlenecks from the regulatory bodies are some urgent issues for resolution.”

In addition, it said the present challenge relating to regulatory agencies duplicating licences and permits and engaging in conflicting directives put operators in a confusing state.

CORAN also appealed to organised labour and fellow Nigerians to give the new administration time to sort out what it termed the deregulation quagmire, which it said had bedevilled the country for long.

“The initial pains will soon be over if we follow through with determination and the necessary human face and palliatives, which must be injected to cushion the social impact of deregulation,” CORAN stated.

According to the group, the anticipated capacity expansion in the production of local crude refineries of its members will ultimately solve the challenge of domestic petroleum product refining.

It lauded all stakeholders who worked to ensure the approval of the white paper on the report of the committees on establishment of modular refinery intervention funding and technical committee on crude oil domestic supply obligation, among others.

Despite what it said were harrowing conditions still militating against smooth operation by its members, CORAN said its members had continued to brave the odds by bringing more facilities on stream.

CORAN noted that it was encouraged by the feat achieved by the Dangote refinery and expressed the hope that it will mark the beginning of greater things within the petroleum refining space in Nigeria.

It stated, “We acknowledge the fact that despite the optimism of the positive impact of the coming on stream in the shortest timeframe of Dangote refinery, small and medium-sized modular refineries are needed and essential to meet the demand of fuel supply and bring about competition necessary for the economy.”

The group also congratulated its members that had floated modular refining facilities, including OPAC, Duport, Edo refinery, WalterSmith, and Niger Delta refinery on the successful completion of their refinery plants and commencement of operations.(www.naija247news.com)

Peters Anene, News Editor
Peters Anene, News Editorhttp://Naija247news.com
Anene Peters is the news editor for Naija247news Media Group. He started his journalism career as an intern on tech and science. He's a graduate of Abia State University with a major in Computer Science and Communications. You can contact him for press events on 0903 927 6505 Email: anene.peter@naija247news.com

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