Fuel scarcity looms as marketers threaten withdrawal of service over payment

Oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have threatened to withdraw their services if the Federal Government fails to disburse the outstanding payments due to their members for importing premium motor spirit (PMS) under the Petroleum Subsidy Fund Scheme.

They warned that it could lead to another round of fuel scarcity if not promptly resolved. The oil marketers pleaded with the minister of finance and coordinating minister for the economy to quickly intervene, as the next five working days would be crucial to members’ capacity to continue to operate.

A letter addressed to the minister by the association through Thomas Olawore, MOMAN executive secretary, stated that despite previous assurance from the government to reimburse marketers the under recovery due to them as verified by the Petroleum Products Pricing Regulatory Agency (PPPRA), the government had failed to honour its agreement.

“At the previous meeting, you empathised with the marketers and committed to full restitution provided these were verified by the Petroleum Product Pricing Regulatory Agency (PPPRA).

You also assured marketers that they would be fully reimbursed for the interest and foreign exchange differential elements of their under recovery within 30 days of the meeting. “Furthermore, you committed to immediately issuing Sovereign Debt Notes (SDNs) for the outstanding under recovery with full payment on or before April 28, 2015.

“But regrettably, despite your above commitment and assurances to date, marketers have only recieved approximately N30 billion in the forex differential claims, out of the N100 billion owed. In the same vein, only N345 billion has been received in core subsidy payments, covering payments up to the second quarter of 2014,” the letter reads.

The letter noted that as at March 31, 2015, the total amount due to the marketers, based on all claims verified by the PPPRA, was in the region of N270 billion, but only N200 billion was earmarked for them in the 2015 budget. This, according to MOMAN, constituted “a great cause of concern”  for her members.

Similarly, MOMAN enumerated that the delays in the payment of the verified sums had ensured that the marketers could not fulfil their financial and non- financial obligations.

But not withstanding this, they had continuously supplied adequate petroleum products into the country especially during the just concluded general elections. Olawore warned that the marketers who were currently experiencing “commercial hardship” as a result of cash flow constraints caused by these delayed payments and compounded by devaluation of the naira, higher inflation, and increase in lending rates might down tools if this impasse is not resolved.

He explained that the consequences would include a significant scale down in petroleum products supply into the country and MOMAN members being left with no option but to streamline overhead costs and workforce “in the very immediate future.