Naija News

CONFUSION was the order of the day yesterday, in Abuja, as fuel
scarcity saga, which began on Wednesday, worsened in the federal
capital city, even as the causative factor(s) became only speculative.

The nation's oil marketers had earlier threatened to go on strike,
fuelling suspicion that the warning could have given rise to panic
buying and concomitant hoarding of the commodity.

There were however, hints that tanker drivers have ceased lifting
supplies to the fuels stations in the Federal Capital Territory.

Already, the Coordinating Minister of Economy and Finance Minister,
Dr. Ngozi Okonjo-Iweala, met with the oil marketers on Wednesday to
address issues raised in their threat to embark on strike.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, also
yesterday, in Abuja, appealed to oil marketers to shelve their strike
and allow Nigerians celebrate the Eid-el-Fitr.

The minister, who noted the queues at the fuel stations in the Federal
Capital Territory, pleaded with the tanker drivers to resume
transportation of the product to Abuja.

According to her, the Federal Government was taking necessary steps to
address their grievances.

She assured the tanker drivers that the Ministry of Finance would
ensure that the situation was addressed and marketers paid their
genuine claims.

"It's with a great deal of concern that the Ministry of Petroleum
Resources has noticed the increasing queues at our filling stations,
particularly in Abuja.

"It is also very clear that the Ministry of Finance is working very
hard at this time to address the situation at hand and I will like to
appeal particularly to the marketers to please cooperate with the
Federal Government, particularly as we go into Eid-el-Fitr," she said.

She however, stressed that the hitch had nothing to do with the
non-availability of the product as the Nigerian National Petroleum
Corporation (NNPC) and the Pipelines and Product Marketing Company
(PPMC) had 40 days strategic reserve.

"I want to assure Nigerians that the NNPC and the PPMC have no
scarcity of products and that in fact, we have 40 to 45 days stock in
our reserves at this time," she said.

Independent oil marketing and depot companies have asked the Federal
Government to pay their outstanding subsidy claims put at N200
billion.

The oil marketers warned the government of the impending fuel crisis
that would follow shut down of their operation should the Ministry of
Finance fail to reimburse them their subsidy claims since January,
adding that interest rate has risen to a minimum of 22 percent while
interest charge in Naira stands at N3.7 billion per month.

The oil marketing companies, depot and jetty owners under the aegis of
Major Oil Marketers Association of Nigeria (MOMAN), Depot and
Petroleum Products Marketers Association (DAPPMA), Independent
Petroleum Marketers Association of Nigeria (IPMAN), and Jetties and
Petroleum Tank Farms Owners of Nigeria (JEPTFON) have warned the
Federal Government to pay their members all outstanding subsidy claims
or the country will face severe fuel scarcity.

The Associations explained that their members own over 25,000 filling
stations, have tank farms and storage facilities with about 2.5
billion litres and with dealers in excess of 25,000 and employ about
300,000 station attendants and over 100,000 drivers and mates.

They added that there are about 100,000 direct staff and several
millions of indirect staff such as contractors and peddlers.

The marketers argued that with the current daily consumption of about
35,000mt per day, it means that about 1,050,000 mt tons of premium
motor spirit is consumed monthly, which translates to about
$1,050,000,000 monthly at an average price of $1,000 per metric ton.

They noted that the subsidy element, which is about 35 percent, will
bring the average amount per month to about $367,500,000
(N60,637,500,000), pointing out that with the new payment method, it
will take government almost three months to pay one month claim.

The Presidential Committee on Fuel Subsidy Payment headed by the
Managing Director and Chief Executive Officer of Access Bank Plc,
Aigboje Aig-Imoukhede, had in its report noted that both the Nigerian
National Petroleum Corporation (NNPC) and the marketers made total
claims of N2,109,386,944,946.92 in 2011, with the NNPC claiming
N981,734,423,649.56, while the oil marketing and trading companies
submitted claims of N1,127,652,521,297.36.

However, the outstanding arrears of 2009 and 2010 subsidies were
included in NNPC's claims for 2011.

Of the N981.7 billion claims submitted by NNPC for 2011, the
corporation paid itself N764,944,448,471.72 in 2011 by deducting it
directly from the cost of crude oil allocated it by the Federal
Government.

NNPC also deducted another N210 billion in 2012, leaving N6.78 billion
as government's outstanding obligation.

But in 2012, the corporation submitted fresh claims of
N310,362,437,515.12 as arrears from 2009, 2010 and 2011, bringing its
total outstanding arrears for 2011 to N317.15 billion.

Okonjo-Iweala said between April and August this year, the government
through domestic borrowing had raised N42.666 billion to pay fuel
marketers to make products available in the country.

The minister, while reacting to the claims by some marketers said the
true position was that the government had been meeting its obligations
to the marketers for all legitimate claims. The Minister made this
clarification at the inaugural meeting of the newly constituted Board
of the Nigerian National Petroleum Corporation.

She said: "For instance, between April and May 2012, batches D/12 and
E/12 involving 14 oil marketers with a claim of N17 billion were fully
settled through the issuance of Sovereign Debt Notes and other
relevant documentation."