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.