Fuel Scarcity Looms As Marketers Refuse To Import Fuel

Shortage of petrol looms nationwide from next month as oil marketers serve a notice of their intention to shun importation of products in the third quarter.
The country imports the bulk of its petrol needs through a subsidy regime.
The marketers blame their decision on lack of funds and inability to secure loans from banks as a result of the N200 billion owed them by the government.
In a joint letter written to the Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Mr. Reginald Stanley, dated June 22, enumerated factors responsible for their inability to execute the third quarter import permits.
The letter ii signed by Chief Sylverius Okoli, Chairman, Depot and Petroleum Products Marketers Association (DAPPMA); Mr. Obafemi Olawore, Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN); Mr. Mike Osatuyi, National Secretary, Independent Petroleum Marketers Association of Nigeria (IPMAN); and Mr. Venkataraman Ventatapathy, Managing Director, Nigerian Independent Petroleum Company (NIPCO).
Titled: “PMS allocations under the Petroleum Support Fund (PSF) scheme for the third quarter 2012,” the letter reads: “We the downstream petroleum industry companies from the private sector participating in the PSF scheme hereby acknowledge receipt of the Q3 2012 PMS allocations.
“The current business environment in the sector makes it necessary to bring to your attention factors that inhibit our ability to import the said volumes in Q3 2012.
“Due to the fact that issuance of Sovereign Debt Notes covering balance 2011 and current 2012 PMS import transactions were initially severely delayed and now currently suspended, we have huge outstanding, verified and unpaid subsidy claims in excess of N200 billion from the Federal Government.
“Non-reimbursement of the subsidy claims impairs the ability of any company to meet its obligations to the banks for loans advanced for the purpose of importing PMS under the scheme for the Nigerian public.
“This inability to repay has led to significant interest rate and exchange rate differential exposure which have to be claimed by the participating companies and reimbursed by the Federal Government.
“Conflicting statements by senior government officials as to the adequacy or inadequacy of the amount appropriated for subsidy in 2012 and the subsequent halt in issuance of the Sovereign Debt Notes as stated above, has led to an atmosphere of extreme uncertainty in which most banks are reluctant to provide further funding for importers and others are only willing, under extremely severe and uneconomic terms for our companies.
“Meanwhile, the volume of imports by our companies is dwindling at an alarming rate, due to non-reimbursement of outstanding subsidy claims and the inability of importing companies to secure financing. Despite the recent allocations awarded, there is currently no prospect for a reversal of this trend, which has immense implications for the efficient supply and distribution of PMS to the Nigerian public. Based on the foregoing, we hereby request that as a matter of extreme urgency and as the only means to ensure continued importation and supply of regulated products (PMS and HHK), the following actions are taken:
•The Ministry of Finance ensures the immediate resumption of the issuance of Sovereign Debt Notes by the Debt Management Office for all legitimate transactions that have been completed and audited.
•The PPPRA ensures conclusion and calculation of all outstanding legitimate claims (including but not limited to foreign exchange and interest rate differential claims) by June 30, 2012.
•The Ministry of Finance ensures cash backing for the Sovereign Debt Notes that have already been issued and payment effected.
•All valid outstanding claims for 2011 and 2012 be paid without further delay.
•A statement assuring the finance community of the Federal Government’s ability and willingness to make good its obligation to importers in relation to the subsidy scheme be issued by PPPRA and the office of the Honourable Minister of Finance.
“We believe that these actions will provide the necessary assurance to importers and financial institutions to enable continued importation and distribution of PMS in the country.”
The PPPRA in the first quarter issued permits to 42 oil depots and facility owners to import a total of 3,755,000 metric tons of Premium Motor Spirit (petrol), which is equivalent to 5,035,455,000,000 litres. 

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Chris Kehinde Nwandu is the Editor In Chief of CKNNEWS || He is a Law graduate and an Alumnus of Lagos State University, Lead City University Ibadan and Nigerian Institute Of Journalism || With over 2 decades practice in Journalism, PR and Advertising, he is a member of several Professional bodies within and outside Nigeria || Member: Institute Of Chartered Arbitrators ( UK ) || Member : Institute of Chartered Mediators And Conciliation || Member : Nigerian Institute Of Public Relations || Member : Advertising Practitioners Council of Nigeria || Fellow : Institute of Personality Development And Customer Relationship Management || Member and Chairman Board Of Trustees: Guild Of Professional Bloggers of Nigeria

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