Pay Our Subsidy Arrears, Oil Marketers Tell FG

Oil marketers in the country yesterday renewed demands for payment of N250 billion outstanding subsidies owed them by the federal government.

This is coming on the heels of the federal government’s announcement on Sunday of the reduction of fuel price from N97 per litre to N87 per litre.

The marketers, under the aegis of Major Oil Marketers Association of Nigeria, MOMAN, demanded for an increase in N4.60 fuel distribution margin accruable to them on each litre of fuel, while protesting that the Sunday announcement by the government marks the first time that the government would not discuss planned reductions in oil price with marketers before going public.

The executive secretary of MOMAN, Thomas Olawore, who spoke at a press briefing in Lagos was silent on the volume of increase his association is demanding on their margin but indications are that the marketers desire a hike of about 25 per cent.

He stated that the budgetary provision of N200 billion for subsidies in 2015 is not even enough to pay the N250 billion outstanding subsidies of 2014.

“The agreement we signed with the PPPRA must be honoured. Part of the agreement is that payment of our outstanding subsidy should be made after 45 days according to the agreement; interest and foreign exchange fluctuation must also be respected and honoured,” he pleaded.

“Our demand to government is pay us what you owe us in 2014 and we want them to offset everything they owe us on interest and foreign exchange,” Olawore insisted.

Arguing that the fall of global prices of crude oil doesn’t necessarily translate to a reduction in fuel prices, Olawore insisted that the federal government has to pay more subsidies to marketers even with the new price slash.

“On Sunday just as we were about to sleep we heard the news of the decrease in price. There was no notice given until we were called for a meeting on Monday,’ he observed.

Olawore stated that at the meeting, the marketers were informed by the executive secretary, Petroleum Products Pricing Regulating Agency, PPPRA, that it is the minister’s prerogative to announce decrease or increase fuel prices. He also stated that the PPRA executive secretary backed up the position by quoting from the Petroleum Act.

“All the distribution margins; marketers margin, transport margin, marine margin were not affected by the price reduction. Effectively, it was the ex-depot price that was changed,” he observed.






     

     

    He said that oil marketers are not happy about the turn of events particularly as they had been clamouring for increased distribution margins.

    “We do not object to N87 and we will comply. But the time of compliance generally is affected by the way the announcement was made. Before any announcement we are supposed to be informed but this one was kept secret until that Sunday.”

    In response to the oil marketers’ position, the minister of Petroleum Resources, Diezani Alison-Madueke, has set up a committee to review the demand for distribution margin hike before acceding to MOMAN’s demands.

    She also ordered the Department of Petroleum Resources, DPR, to ensure total compliance to the new price on the part of the oil marketers across the nation.

     

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