N264 Billion Unpaid Subsidy, Oil Marketers Allay Fears of Fuel Scarcity

MAJOR Oil Marketers Association of Nigeria (MOMAN) has allayed fears of fuel scarcity that may be occasioned by the delay in the payment of outstanding N264 billion subsidies and interest on foreign exchange.

There were reports in the media that there might be another round of fuel scarcity in the country as the Federal Government was yet to fulfill its subsidy obligation to marketers.

But the Executive Secretary of MOMAN, Olufemi Olawore, in a media briefing Tuesday, said that the Ministry of Finance has promised to ensure full payment of the subsidy arears for parts of 2014 and early 2015 between now and March this year.

He warned that whatever tightness the country may experience in respect to fuel supply would be temporary, adding that the association is working hard to ensure consistent fuel supply in the country.

Olawore stated: “The Federal Government paid N375 billion as subsidy to us for 2013 and part of 2014. However, there is still outstanding subsidy for part of 2014 and early 2015. Specifically, the government is yet to make payment of N164 billion as subsidy and N100 billion as interest on foreign exchange, which makes a total of N264 billion yet to be paid by the Federal Government.

“The good news is that we had a meeting with the Minister of Finance on Monday and she has given us schedule of payment between now ad March this year, which is agreeable to us. We believe her and the product situation, which was actually going down would pick up as soon as possible.

“Even if there is going to be tightness in the supply of products, it is going to be a temporary one. We are going to play our own part to ensure product supply in the country”.

Olawore said that the devaluation of naira has also increased the cost of importation of fuel and the amount of subsidy being paid by the Federal Government.

According to him, as the exchange rate of naira to a dollar continues to increase, the cost of importation of petroleum products and the interest on foreign exchange will also continue to be on the high side.

He identified speedy passage of the Petroleum Industry Bill (PIB) and full deregulation of the downstream sector as the way out of the issues of fuel scarcity and subsidy payments. “It is only full deregulation of the downstream sector that will encourage investment in private refineries. Government cannot fix the price of fuel and expects people to invest in the sector. You need some conducive conditions to be able to set up refineries in the country. Once you deregulate, refineries will begin to come up.

“We also believe that the PIB will go a long way to pave way for the progress of the down stream sector and give opportunity for private investments in refineries”