Beyond Pardon

Despite the part-payment of subsidy arrears to fuel importers, the fuel situation across Nigeria remains dire, as marketers of the product give fresh conditions before embarking on full importation
By Oji Odu
Perhaps, the Federal Government has lost the battle to end another round of what has become
a perennial fuel crisis in the country, as the situation continues to worsen with each passing day.
The Department of Petroleum Resources (DPR), which is the policing arm of the Nigerian National Petroleum Corporation (NNPC), has as a result become helpless in enforcing compliance among the marketers in the industry, many of who shy away from selling at the official pump price of N65 per litre. Instead, the fuel dealers continue to exploit motorists nationwide by selling the product at between N80 and N100 per litre.
The Source’s findings reveal that many interventionist methods have been explored by the authorities, yet the problem has remained intractable with most fuel stations shut, while long queues of vehicles continue to be the lot of few stations that dispense the product.
Recently, the Federal Government announced that it had paid N300 billion, being part of the subsidy debt of over N700 billion owed the fuel importers to enable them resume full fuel importation to complement the efforts of the NNPC. According to the Minister of State for Petroleum, Odien Ajumogobia, the nation spends about N45 billion monthly on importation of 18 million litres of fuel daily.
In spite of the part-payment and the several meetings between stakeholders and both the Petroleum Minister, Dr. Rilwan Lukman and Ajumogobia, no progress appears to have been made in resolving the logjam. Marketers, The Source gathered, are still not keen to resume full importation of the product.
Although the government had made spirited efforts in the past weeks to appease the importers through the payment of subsidy arrears, the marketers, The Source’s findings, have given the government fresh conditions before they would resume full importation of the product.
The marketers are demanding promissory notes from either the Central Bank of Nigeria (CBN) or the Federal Ministry of Finance to give to the banks as collateral for the credit facilities to import fuel. They had complained that the banks are insisting on getting promissory notes before any money is loaned to them to finance fuel importation, while subsidy claims to the government, they said, are only paid after 45 days of product delivery from either the CBN or the Federal Ministry of Finance.
Also, the marketers want the differentials that might accrue, after the importation of fuel, to be borne by the government.
The Source learnt that in his reaction to the alleged demands and claims by the marketers, Ajumogobia said he was unaware of such and that the recent payment of subsidy arrears by the government is enough to give the banks confidence that the importers would pay back loans.
But a senior official of the United Bank for Africa (UBA) who craved anonymity due to the situation in the banking industry, told The Source that all he could say is that the banks are in the period of recovery and so seldomly give out loans, especially after the Federal Government, through the Lamido Sanusi-led CBN, began intense policing of the banks.
He said: “I can't say anything about the alleged marketers' claims that banks demand promissory notes as collateral before credit facilities are granted them. What I can say is that since the government turned around and came after the banks, most of which unpaid credit facilities were used to finance fuel importers, the banks have stopped financing these businessmen who have failed to pay back, some more than a year after taking the loans. For this, some banks Chief Executive Officers (CEOs) are incarcerated.
“Even the promissory notes are not reliable because they are mere promises to pay. Because of this, the banks make sure that tangible collateral is presented by these importers before banks give them credit,” the banker further disclosed.
The desperation of the banks to recover non-performing loans from August, 2009, stemmed from the risk management regulation of the CBN, which compels them to make immediate and full provision for their toxic assets and bad loans.
Because of this, the banks are not only moving aggressively to recover outstanding loans, but are also shying away from financing fresh imports of petroleum products – a development which sparked off the current fuel crisis.
An inside source at the Mosimi depot of the NNPC described the situation to The Source thus: “The fuel situation is not encouraging at all, because the level of scarcity of the product is high. The DPR is helpless, which is why it is turning a blind eye to the profiteering by fuel dealers who also sell epileptically.
“The government is waiting for these importers to import fuel to bridge the huge demand gap so that they can start distributing to most parts of the country.
“Some of the major marketers have imported their consignments which are arriving in tickles, a situation which is blamed on a ploy to continue perpetuating the scarcity and profiteering, even as oil prices in the international market reaches $83 per barrel mark, the source said.”
Meanwhile, the Depot and Petroleum Products Marketers Association (DAPPMA), an umbrella body of petroleum marketers and depot owners, has called on the Federal government to revisit its decision to restrict depots that receive and dispense fuel imported by the NNPC. This, the Association said, is to accommodate distributors in Lagos, Calabar and Port Harcourt and in the process check the creeping fuel crisis.
The DAPPMA said in a memorandum to the Petroleum Minister that its members are ready to release their depots in these areas to receive imported fuel by the NNPC and at N55.90 ex-depot price.
“PPMC (Pipeline Products and Marketing Company) be directed to sell this product to our members on a delivery basis to our facilities at a price that would provide for a discount for through-put charges, jetty fees and pipeline charges stipulated under PPPRA Template, to enable DAPPMA members sell ex-depot at the PPPRA price of N55.90 per litre,” the memorandum stated.
Also, the group stated that in a situation DAPPMA members have access to coastal shipping vessels and can receive fuel cargoes offshore, “PPMC should sell such cargoes to our members on a Cost Insurance and Freight (CIF) basis offshore delivered price…..”
As the effects of the fuel scarcity continue to bite harder, the Federal Government, The Source learnt, is considering fixing trackers to fuel tankers to make sure that products reach their destinations and are not diverted. They alleged sabotage by the tanker drivers, urging their leaders to compel its members to align with government’s efforts to end the nation's lingering fuel crisis.