Importers Of Petroleum Products Say Gen. Muhammadu Buhari Must Come Clean On His Threat To End The Subsidy Regime As Solution To Lingering Product Scarcity
Tough talk and threats of subsidy withdrawal have been identified as key reasons for prevailing scarcity of petroleum products in the country, according to key players in the domestic fuel market. The revelation comes with a demand by government agencies, technocrats and investors on the incoming administration of Gen. Muhammadu Buhari to sustain policies and programmes initiated and progressed by the outgoing administration of President Goodluck Jonathan in the petroleum sector. The fuel supply situation in the country has remained gloomy with no indication of fresh import by marketers. Depot managers had also declared that petrol stock levels had fallen below crisis levels, raising concerns that scarcity will go acute in the days ahead.
The UNION enquiries in companies operating in the downstream petroleum industry showed that key concern among players in the domestic fuel market, is the campaign promise of Buhari and the All Progressives Congress (APC) to alter the subsidy regime. For this reason, marketers have frozen imports following uncertainties as the country undergoes political transition. Executive Secretary of Major Oil Marketers Association of Nigeria (MOMAN), Mr. Thomas Olawore, told The UNION in an exclusive chat that the concern of the marketers had gone beyond subsidy payment to the policy environment that will govern market operations after May 29. In painting a very bleak outlook for the domestic market, Mr Olawore said that fuel importation had become illogical under the prevailing situation where the marketers are owed subsidy claims. He said the zero budgetary allocation for subsidy in the 2015 budget coupled with no specific forward-moving stand by the incoming administration on fuel subsidy, led to market uncertainties.
He pointed out that the N143 billion provided for subsidy in the 2015 budget was exhausted in the first six weeks of the year, adding that there should be official clarification on fiscal rules on fuel importation. He made it clear that there should be official pronouncement on the status of the market because, according to him, “traditional subsidy arrangement is no longer clear”. The UNION reports that the marketers who are in dispute with government over outstanding N200 billion subsidy claims appear to have given up hope that the outgoing administration would pay the money before its exit at the end of the month. Whereas the marketers demand N200 billion, government admits only N131 billion, which has however not been paid. Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, had promised to raise an inter-agency committee to harmonise the figures, but marketers insist that continued delay in payment has escalated cost of funding and continued to grow the bill.
Under the prevailing agreement on importation of petroleum products, government is obliged to defray accumulated interests on funding if it did not pay the marketers subsidy claims within specified period after cargo delivery. Besides, the industry is apprehensive of the radical posture of the incoming government which had criticized all programmes of the outgoing administration and branded the subsidy programme a symbol of corruption. Meanwhile concern for sustainable government policies re-echoed at forum on refinery investments yesterday where participants, responding to a voice poll by the moderator, unanimously demanded the incoming administration to sustain policies that had grown investments in the petroleum sector so as to strengthen investors confidence in the economy.
According to poll conducted by the moderator of the interactive forum hosted at Eko Hotel, Lagos, no voice rose to support changes in the running policies of the present administration in the petroleum sector. Ceremony anchor, Mr. Richmond Osuji, had called for the poll in response to concerns about sustenance of gains made in acclaimed policies of the present administration in the petroleum sector, including the Nigerian Content, Gas-to-Power, Gas Revolution, Gas grid development and many more. All participants at the event rose in support of the demand that the incoming administration should sustain momentum on running industry programmes.