Tuesday, 9 June 2015

Nigerian fuel marketers say they are working to ease shortages

THERE are indications that fuel marketers, may have agreed to distribute fuel brought in by the Nigerian National Petroleum Company, NNPC, after talking with the new administration last weekend.

This is as many petrol stations in Lagos still sell above the official pump price of N87, as other cities are still suffering from shortages despite the end of a fuel distribution strike.

After the negotiation last weekend, fuel is expected to become available not just at NNPC retail stations but those owned by major and independent marketers to reduce the queues of double-parked cars.

Nigeria now depends wholly on swapping its crude for fuel imports, Obafemi Olawore, Executive Secretary for Major Marketers Association of Nigeria (MOMAN) said, as those waiting for subsidy payments are unable to secure commercial loans to bring in fresh supplies.”At the moment we are unable to import because we don’t have the support from the banks,” Olawore told Reuters.

Olawore said MOMAN had contact with President Muhammadu Buhari’s new government and was optimistic that payments of around 291 billion naira (nearly $1.5 billion) promised in writing by the outgoing administration will be honoured.

A spokesman for the presidency said he could not immediately comment. Suppliers, dependent on subsidies, refused to distribute fuel for several weeks in May, over fears that if they were not paid under the old government that the cash-strapped new one would not be able to foot the bill and would scrutinize the costly subsidy payments that were the source of a $6.8 billion fraud scandal in 2012.

Electricity output was nearly halved and private generators that produce most of the electricity for the nation’s 170 million inhabitants ran out of diesel, days before Buhari’s inauguration as the new president on May 29. Nigeria must import nearly all of the 40 million litres per day of gasoline it consumes as its refineries have been either halted or operating well below 50 percent capacity since last year.

Meanwhile most petrol stations along the ever-busy Oshodi – Apapa expressway still sell fuel at between N100 and N120. The same scenario is applicable to the petrol stations on the Mile 2 – Badagry expressway.

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