AS part of efforts for putting a halt to the
lingering fuel crisis, Petroleum marketers have suggested Crude swap
between them and the Federal Government.
With the crude
swap, government is expected to allocate certain barrels of crude oil to
the markers, which the latter will in-turn take to refineries abroad,
process and return same quantity as finished product.
The
marketers had stopped importation of petroleum products since March when
controversy over subsidy debt started, leaving the business of fuel
importation to the Nigerian National Petroleum Corporation (NNPC), which
now imports only 50 per cent of required products into the country.
The
marketers, who are working on the ‘‘swap” arrangement have already sold
the idea to the Federal Government for adoption, and assumed that it
could bring to a permanent end the subsidy regime and the current fuel
crisis in the immediate future.
According to them, the arrangement was necessary “as the government can no longer sustain subsidy of the products.
The
long-term solution, according to the marketers required the
encouragement of local refining of the crude so to put a permanent end
to importation of the commodity, and to make it affordable to all
Nigerians.
National Chairman of Independent Petroleum Marketers
Association of Nigeria (IPMAN), Chief Okoronkwo Chinedu, gave the hint
during the week that the marketers were working on ‘‘swap” arrangement
with the government as a short-term solution.
The IPMAN chairman
said his association is no longer interested in subsidy, but its
alternative that could bring normalcy into the Nigerian petroleum
market.
He also suggested local refining of crude as the long-term
solution to the current fuel crisis, adding that his association had
already secured 1,350 hectares of land in Itobe, Kogi State as a place
for its own refinery for which it had applied for license from Petroleum
Pipeline Products Regulatory Agency (PPPRA).
‘‘The government can
no longer sustain the subsidy regime. So the alternative in the short
run, is the ‘‘swap arrangement.” Give us the crude, we will export and
bring back the refined products in the same quantity of crude given to
us. The price of the crude is no longer the way it used to-be. We can
bring in fuel without subsidy. We have foreign partners who can wet this
country. If they give us crude, we can take out and bring back refined
products without subsidy. They don’t have money to fund subsidy policy
because of the dwindling revenue”.
The Major Marketers Association
of Nigeria (MOMAN) also confirmed that its members have not been
importing subsidy based petroleum product.
The Executive
Secretary, Olawore Obafemi, said they have only been helping NNPC in the
distribution of the products, thus confirming claims that only 50 per
cent of local demand of the product is being supplied.
‘‘We are
not importing petroleum products, especially those that are subsidy
based. We are distributing what NNPC gives. As they give, we send to the
market”, Olawore said, adding that the government was trying to get to
the marketers in the attempt to resolve ripples emanating from subsidy
regime”.
Like his IPMAN counterpart, Olawore said it was obvious
that government could no longer sustain the subsidy regime, hence the
support for total deregulation of the entire oil and gas sector.
‘‘We
are 150 per cent in support of deregulation of the oil sector, because
the government can no longer sustain subsidy. If, for instance, we are
consuming 40 million litres of fuel daily, it means government is going
to pay N1.6 billion daily on subsidy. Why should government sustain
that? Where is the money? They should deregulate and put in place a very
strong regulatory agency for operational matters, not on price. The
agency should only monitor the market as we are doing in Telecom sector
and to call players to order. Nigeria, the government and Nigerians are
not enjoying the subsidy regime. The only people that are enjoying it
are the foreigners, the refineries abroad,” he lamented.
He gave
reasons why deregulation is necessary. He said it would encourage the
emergence of local refineries that will cut all import costs, which ,
according to him, include $30,000 Temporary Import Permit paid by
marketers to the Nigeria Customs Service, three per cent freight charges
payable to the Nigeria Maritime Administration and Safety Agency
(NIMASA) and charges by the Nigerian Ports Authority (NPA). All these
charges, he said, were being collected by the agencies in dollars.
Although
the tension created as a result of fuel scarcity last month is yet to
subside completely, NNPC said it has enough products to sustain the
market as it is today, even when many filling stations are yet to
receive supplies.
The corporation said it was aware that the
market ‘‘is not fully wet,” but it might not be able to supply more than
half of the market demand as a result of government regulation.
Authoritative
source at petroleum Product Marketing Company, (PPMC), a subsidiary of
NNPC, confirmed that the corporation is now the only organization
importing fuel, as the marketers had discontinued importation to protest
non-payment of subsidy debt owed them by the government.
‘‘We are
only importing 50 per cent of our local consumption. Before now, NNPC
was importing 50 per cent of local need, while the remaining 50 per cent
was by marketers. But they have stopped importation and NNPC cannot go
beyond its 50 per cent. So the fuel you have now is from NNPC, which is
sustaining the country at the moment.
On pricing, consumers have
contended with increased price of the products that used to-be sold at
N87 per litre. The price per litre now varies between N87 and N130 per
litre.
But the Lagos State Chapter, of Independent Petroleum
Marketers Association of Nigeria (IPMAN), absolved its members of any
blame over the current hike . Rather, it put the blame on private
petroleum distributors who sell fuel at a cost of N105 or N110 per litre
so that the economy of the nation would not be grounded.
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