Fuel scarcity looms as indebted marketers are denied licence

The possibility of sustaining stable fuel supply chain in Nigeria looks gloomy as the Minister of State, Petroleum Resources, Ibe Kachikwu, has directed the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Nigerian National Petroleum Corporation (NNPC) not to renew import licence and loading of petroleum products to oil marketing companies indebted to government through its agencies.

In a three-paragraph memo to the NNPC and PPPRA, Kachikwu directed the agencies to withhold import licences of all oil marketers with proven cases of indebtedness to them.

He stated that special attention should be paid to the marketers, who also owe the Petroleum Equalization Fund (Management) (PEF), in respect of N6.20 per litre bridging allowance due to the fund.

Though the minister did not mention the amount involved, sources put it to be the about N2.6 billion, covering charges on loading at NNPC depots and the abridged payment cost to PEF since 2015.

But the fear has been expressed by some stakeholders that there would be scarcity of fuel in some parts of Nigeria where bridging costs still operate, if the minister ‘s directive is strictly adhered to.

However, an aide to the minister said the directive became necessary following a series of complaints by members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) and transporters under the National Association of Road Transport Owners (NARTO) that bridging claims owed them by the PEF may hamper smooth distribution of petroleum products across the country.

It was learnt that in compliance with the minister’s directive, many marketers were seen at various agencies reconciling their accounts with the relevant agencies.

But, a member of the IPMAN, Chief Muyiwa Adeleke, of Shark Oil, a Lagos-based marketer, said there was an understanding with government agencies in the sector to grant extension of time for settling all outstanding debts as the recession made many firms not to break even.

“Denying the marketers renewal licences now will spell doom, because fuel scarcity will return, especially in the areas outside Lagos and Abuja,” Adeleke said.

The GM (Corporate Service) of PEF, Dr. Goddy Nnadi, confirmed that the fund had started receiving written inquiries from marketers asking for more time to clear their debts.

“As at today any marketing company that is owing PEF cannot be allowed to import until they service that debt and even if you are getting your product from NNPC, if you have not shown any evidence of payment of the bridging allowances, NNPC will not allow you to load,” a source at the PPPRA was quoted as telling a group of marketers on Monday.

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