How Nigeria Averted Another Fuel Scarcity

It was a game of wits between the Federal Government and oil marketers last week. The oil marketers, apparently taking advantage of the coming yuletide, had penultimate Sunday, given the Federal Government a seven-day ultimatum to settle outstanding debts totalling N800 billion, failing which depots would cease operations across the country.
The marketers requested that forex differential and interest component of government’s indebtedness to them be calculated up to December 2018 and be paid within next seven days from the date of the letter sent to the government.
The oil marketers, comprising major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs) said the only way to avert the strike action was for the government to pay them the outstanding debts through cash option instead of the promissory note proposed by the government.
Sources reveal that the decision of the independent marketers to withdraw their services was ignited by the passive response from the Nigeria National Petroleum Corporation (NNPC) to their demands, on the ground that there was enough fuel to last across the country through the season.
Jilted by apparent indifference of the NNPC to their demand, the independent marketers promised to make real their threat by mobilising their rank and file for a show down.
However, in a swift response, the Federal Government through the Debt Management Office (DMO) and the federal Ministry of Finance, engaged the marketers in a negotiation to resolve the niggling issues and avert the impending strike action.
It could be recalled that the marketers had earlier rejected the Government promissory offer of N350billion, stating that the amount was not enough to clear outstanding bills, such as payment of staff salaries. Some of the outstanding payments due the marketers are also said to accrue from past administrations, making the issue more complicating, as the present administration seems to be reluctant to clear the outstanding debts.
However, as a matter of urgent intervention, the senate at its last plenary urged the Federal Government to pay outstanding fuel subsidy arrears to the oil marketers within the next two weeks. Chairman, senate committee on Down Stream, Kabiru Marafa, who moved the motion said,” the need became imperative to avert looming crisis in fuel supply due to non payment of accrued subsidy arrears to oil marketers”.
The senate also noted that the accumulated debt has forced some marketers out of business, while most of them are being subjected to “marinal injunctions”.
The senate later made some far reaching decisions to bring a lasting solution to the matter. Some of the resolutions which bordered on public interest includes that marketers should as a matter of public interest rescind their decision on the ultimatum to allow the Federal Government more time to look into their demands, engage the debt management office to determine an appropriate financial instrument for the payment of the debt”.
The higher chamber of the National Assembly, also urged the Federal Government to, “engage marketers and agree on outstanding liabilities to put an end to these subsidy claims, and direct all concerned agencies to immediately pay subsidy arrears as approved by the Federal Executive, Council (FEC) and passed by the National Assembly”.
Meanwhile, Special Assistant on Media and Communication to the Minister of Finance, Mr Paul Abechi, had in a press statement, disclosed that the Federal Government and the marketers have come to agreement, and the marketers have assured the public of product availability, while operations at all depots and sales would continue.
Abechi added that the government was reviewing the initial mode of settlement agreed upon by both parties.
He said, “After the meeting with senior government officials from the Federal Ministry of Finance, the Debt management Office, (DMO), Nigeria National Petroleum Corporation, (NNPC), Central Bank of Nigeria (CBN) Budget Office of the Federation, Accountant General of the Federation, and the Petroleum Products Pricing Regulatory Agency (PPRA), we are satisfied with the arrangement being made by the government to settle the clams of the petroleum marketers”.
However, as the meeting between the Federal Government and the Independent Petroleum Marketers continues today, pundits are of the view that strident measures should be taken to address critical issues in the Nigeria oil and gas sector.
Elder statesman and former Minister of Petroleum, Prof Tam David West, sees fuel subsidy as a monumental fraud which the Buhari administration must do away with to bring some sanity in the system.
David West who disclosed this in an interview with The Guardian newspapers, described a statement credited to Minister of state for petroleum that, “all refineries will work next year”, as scandalous, and unrealistic.
He said there was deliberate sabotage to make the refineries dysfunctional noting that during his time as petroleum minister, all three refineries in the country were working.
“Nigeria has no business importing fuel, and Nigerians need not pay as much as N145 per litre of fuel. Federal Government should make the refineries work, the amount spent on subsidy can build 10 refineries”.
On his part, the chairman, Port Harcourt Refinery Depot of the Independent Petroleum Marketers Association of Nigeria, (IPMAN), Comrade Emmanuel Imimgba, said the association was ready to live up to its statutory obligations and ensure products availability provided the Federal Government lived up to their own bargain. He also called for the refurbishing of the refineries to make products available.
Some Port Harcourt residents and motorists who commented on the issue appealed to the Federal Government and the independent marketers to resolve all contentious issues at stake to save the people from excruciating pains especially during this period of lean economic fortunes.
A commercial motorist, Mr Kenneth Ibe, who plies Port Harcourt –Aba Road, said government should, as a matter of urgency, intervene to avoid any strike action that will worsen the situation.
“We, commercial drivers are ready to perform our duties, but we can only work well when there is enough fuel in the system. Any fuel scarcity will affect our business and also affect the people that are travelling, government should do something about it”.
The days ahead will however, determine the sincerity of government on the matter.

By: Taneh Beemene