Oil marketers have yet to receive a response from the Federal Government regarding the outstanding payment of bridging claims incurred by dealers for the transportation of petroleum products across the country. They might go ahead with their proposed strike after the Sallah break.
Members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) stated on Friday that they had prepared a communiqué to be issued, detailing their demands again, adding that failure of the government to meet the demands would result in the “mother of all queues.”
Also, marketers under the aegis of the Natural Oil and Gas Suppliers Association called on the Central Bank of Nigeria (CBN) to make the United States dollar accessible for the imports of petroleum products, as this would help reduce the costs of the commodities, particularly diesel.
This came as the scarcity of Premium Motor Spirit, popularly called petrol, worsened in Abuja and neighbouring Nasarawa and Niger states, as more filling stations shut their gates to customers, citing a lack of products to dispense.
Oil marketers under the aegis of the Abuja-Suleja IPMAN said on Friday that the government had failed to substantially clear the bridging claims for the transportation of petrol being owed to marketers and that Nigerians should brace up for lengthier queues soon.
About a week ago, oil marketers warned that Nigeria could witness “the mother of all queues” soon if the Federal Government fails to pay the 12-month bridging claims being owed to operators in the downstream oil sector.
They had also denied being paid N74bn by the Federal Government as bridging claims for the transportation of petroleum products.
The Federal Government, through its Nigeria Midstream and Downstream Petroleum Regulatory Authority, had earlier said it paid N74bn as bridging claims to oil marketers for the transportation of petroleum products across the country in seven months.
But the Secretary, Abuja-Suleja IPMAN, Mohammed Shuaibu, whose unit covers Abuja, Kogi, Niger and parts of Nasarawa and Kaduna, stated that though some members had confirmed the receipt of payments, a host of others had yet to receive theirs.
Speaking to our correspondent on Friday on the matter, Shuaibu said, “We’ve reached out to them (government), but there’s been no response. We shall give them our resolutions as contained in our communiqué, and if nothing happens, then the strike will take effect after the break.
“The strike will lead to the mother of all queues because depots in the North and other parts of the country are ready to join us in solidarity. Nigerians should know that the situation is beyond us right now.
“This is because many of our members are going out of business because of the over N50bn bridging claims that have not been paid to marketers. This is not right and something has to be done.”
He said IPMAN would present the resolutions reached by its members to the Federal Government through the NMDPRA by Tuesday before the proposed strike would begin.
He added, “When we return from the break, we will commence the necessary action, for we have put in place everything we need to do.”
Asked precisely whether this would happen at the end of the Sallah break on Tuesday, the IPMAN official replied, “Yes!”
On whether the government had not called marketers to a meeting since the threat to go on strike was issued about a week ago, Shuaibu said, “We met once, as I told you during our previous conversation.
“When we return by Monday or Tuesday we are going to give them our communiqué from the last meeting we held. If they obey, fine. If they don’t, no problem; whatever happens, is not our making.”
Probed further to disclose some of the resolutions contained in the communiqué, he replied, “By the time I give him (NMDPRA boss) you will know because we’ve not concluded (work on) it. However, it is still in respect of our outstanding claims. That means the strike will go on if nothing concrete happens.”
On how the lack of foreign exchange was impacting negatively on petroleum products’ supply, the President, NOGASA, Bennet Korie, explained that the continued purchase of dollars from black marketers by importers had contributed to the dysfunctional state of the sector.
He said, “The high cost of diesel currently is as a result of marketers’ inability to access the dollar. So there is a need for government assistance now. We request for emergency dollar intervention to enable depot owners in Nigeria to import diesel for at least five months to bring down the price of diesel.
“Diesel is fully deregulated, and so marketers need dollars to import it, and this is affecting the price. Diesel importers are getting the dollar from black marketers, and if this continues, the diesel price will further increase.”
Korie added, “If you go to the depots of some marketers, they don’t have products because of a lack of dollars to import diesel, and that is why there is scarcity. But if we have up to 30 depots importing diesel then the price will definitely come down.”
Although the official rate of the dollar by the Central Bank of Nigeria is about N416, the black market rate is currently over N600, and this has made it tough for diesel importers to import the commodity, as they lack access to the dollar from the CBN.
Also, since diesel is deregulated, other marketers alongside the Nigerian National Petroleum Company Limited are involved in its importation, while Nigerian refineries are still dormant in terms of crude oil refining.
Commenting further on the need to clear the unpaid bridging claims, Korie appreciated the government for making an effort in settling the debt, but noted that the FG had not done enough.
He told selected journalists in Abuja that, though the government recently increased the freight rate for transporting petroleum products, the rise in the cost of diesel had made the freight rate increase insignificant.
He said, “We thank the government for the freight rate increase, but the problem we have is this: if you increase the bridging cost, don’t forget that those selling the products run their businesses on diesel.
“So, even though you increase the products’ transportation cost, what about the administrative cost? The price of petrol, for example, has remained the same, but the cost of bringing it to the depot is borne by the marketer.
“And you know that the vessel that will bring the product to the depot now charges more. What they charged you last year is not what they charge you today. When you bring the fuel to your filling station, what you used in running your station last year is not the same now.”
The NOGASA president added, “So no matter how much you increase the bridging claim, the running cost is a problem. The profit margin is also important in the business, and that is why we say the major way out is to solve the problem of diesel.
“Now this is not just for filling stations. It affects every sector of the economy. If you go to our banks now you will find out that some of the banks close around 2pm or 3pm. When you ask them why they will tell you it is because there is no diesel.
“For filling stations, if you run your generators from 6am to 6pm to pump products to customers, you will burn close to 100 litres of diesel. Now, how much fuel are you selling to cover this cost? So, the bridging claim is for transporting products, but it is not enough.”
Korie had earlier told our correspondent that many filling stations were out of operation due to the hike in diesel price.
This was confirmed in Abuja on Friday, as a number of filling stations were shut down due to lack of products, while the few ones that dispensed fuel had long queues.
Also reacting to the issue, the President, Petroleum Products Retail Outlets owners Association of Nigeria, Billy Gillis-Harry, said it was high time the government intervened in the current crisis in the downstream oil sector to avert a crash in the industry.
“The concerns in the downstream oil sector are enormous and this begs for real intervention by government to forestall further deterioration in the industry,” he stated.
The PETROAN president added, “We have said it again and again that full deregulation of the downstream oil business is the way to go to get us out of this quagmire. Also, it is important that we have our refineries running.
“We are ready to partner with the government, especially in getting the refineries working, because once we start in-country refining of crude oil, it will go a long way in addressing these energy crises confronting us currently as a nation.”
The spokesperson for the NMDPRA, Kimchi Apollo, told our correspondent that bridging claims were being paid by the authorities.
He insisted that N74bn was paid to marketers by the agency, and efforts were ongoing to address the concerns of marketers.
“We cannot, as a government agency, release data that does not exist,” Apollo stated.
