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N45bn servicing debt scatters petroleum downstream

As hiccup in the supply of premium motor spirit (petrol) continued into the Christmas week, petroleum product marketers have said the delay in the payment of about N45 billion bridging cost debt has affected their ability to remain open.

N45bn servicing debt scatters petroleum downstream

The debt has skyrocketed in the past two months following the scrapping of the Petroleum Equalisation Fund Board, whose responsibility to settle the transportation cost of petrol has been assumed by the newly created Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.

Speaking to Energy Vanguard yesterday, the Public Relations Officer of the Independent and Major Marketers, Chief Chinedu Ukadike said IPMAN members alone were being owed over N46 billion. Chief Ukadike noted that the inability of the marketers get their bridging claims was negatively impacting their operations.

According to him, “Before now, PEF had been owing marketers before it was scrapped. We are in a very difficult position but we understand that the new management at the NMDPRA is doing its best.

“The issue of owing marketers is chronic”.On the amount owed to the marketers, he said while it was difficult to give exact figures since the transactions were ongoing, “they are not owing to our members less than N46 billion”.

Chief Ukadike also explained that most of the independent marketers were still facing challenges in procuring the product as most private depot owners were either “not loading trucks or are selling above Federal Government prescribed rate. Most independent marketers source their products from private depots and most of them don’t have.

“In Port Harcourt area, for example, there are over 30 private depots but only a handful are selling, even then most are buying at the landing cost of N162 per liter whereas the benchmark for selling is N165/liter. It becomes almost impossible for marketers to do business”.

He called for the full deregulation of the downstream sector, saying the present arrangement was not good for anyone.

“The challenge in the price-fixing”, he explained, adding that “the government should create the right environment for refineries to be built so that this endless system of petrol importation can end and that is critical to developing the sector”.

Also speaking to Energy Vanguard, the National President of the Nigerian Association of Road Transport Owners, NARTO, Alhaji Yusuf Lawal Othman noted that while issues remained, speaking on them during this festive period may further disrupt the supply chain.

He said NARTO was working with the government agencies to ensure that outstanding issues were resolved. Alhaji Othman had last month expressed concerns over the money owed its members by the government agencies.

He said: “First of all we congratulate the government on the passage of the PIA. We also congratulate the new agencies.

“However, we want to know our fate as regards our liabilities with the PPPRA and PEF as regards also going forward. “We want to know our fate.  We are not averse to the government. We are not against it but we are in the dark. Now that the government said it has scrapped the DPR, PPPRA, and PEF, we need to be briefed officially what is the status of our operations now.

“What is the status of our outstanding money with PEF and what is the fate of our current operation?”, he queried.

But the Chief Executive Officer (CEO) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Engr Farouk Ahmed has moved to reassure the marketers, saying the Federal Government will continue to pay the cost of bridging petrol to ensure its availability across the country.

Ahmed in a statement explained that the Authority will also offset all the bridging verified claims by all the stakeholders in the distribution of Premium Motor Spirit (petrol) in the country.

He assured petroleum tanker drivers and other stakeholders that the Authority was determined to continue the payment of bridging rate to ensure effective distribution of products nationwide.

Despite his assurances, however, Energy Vanguard learned yesterday that the inability of the NMDPRA to pay the marketers was due to the failure of most marketers who collect the bridging levies provided for in the pricing template to remit the same to the fund.

A source at the Authority disclosed a particular marketer owed the fund over N50 billion in unremitted bridging collections.

Updated: December 28, 2021 — 9:57 am

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