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FUEL SUBSIDY: BUSINESS NOT AS USUAL FOR MARKETERS

In the spirit of the new regime of fuel import management, The federal government has, through the Petroleum Products Pricing Regulating Agency (PPPRA), released the first quarter fuel import allocations of about 1.5 million tonnes to marketers of Premium Motor Spirit (PMS) also known as petrol. It has aslo slashed the allocation for private depot owners and marketers by over 70 per cent.

The Minister of state for Petroleum Resources, Dr. Ibe Kachikwu, signed the approval and sent it to the PPPRA for disbursement to the marketers.

The Nigerian National Petroleum Corporation (NNPC) will, according to the allocation, imports 78 per cent of the allotment while the private importers who hitherto imported over 60 per cent of the allocation are now left with about 22 per cent of the total allocation.
A source at the PPPRA said that the government cut the numbers of importing, marketing and trading firms to 20 instead of 29 marketers in the last quarter of 2015. The fuel imports are approved for all the five major oil marketers and fifteen independent marketers.

The allocations to five members of Major Oil Marketers Association of Nigeria (MOMAN) were, according to a PPPRA source, cut by about 70 per cent while the NNPC allocation was jerked up from 40 to 78 per cent.

These allocations have been greeted by protests from marketers who felt that the government was planning to run them out of business. “Most of the marketers who got 90, 000 metric tones each in the fourth quarter of 2015 were given k 30, 000 metric tones in the new allocation,” he said, adding that the PPPRA took the tough stand on allocation “because so many companies could not meet up with their Q4 allocations”

The marketers, the source said, have “expressed the fear that this allocation will turn NNPC into a monopoly and portend a gloomy business for them. This has made the government to slate a mid-first quarter review for February 15 when the level of their importation would be reassessed.”
The newly released allocation is a 13 per cent reduction in the volume of imports released for the second quarter of 2015.
Meanwhile, as part of efforts to bridge the huge supply gap occasioned by the current fuel scarcity, the NNPC has commenced direct delivery of petrol to Independent Petroleum Marketers Association of Nigeria (IPMAN) retail outlets across the country.