The current petrol supply challenge facing the nation owing to delay in subsidy claim payment and foreign exchange shortage may not abate soon.
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Petroleum product marketers said the fuel scarcity could continue up until December.
They said with the approval of the N413bn subsidy arrears by the Federal Government still awaiting clearance at the National Assembly, there were other issues such as perfecting the paper work and getting the forex equivalent of the N413bn payment.
The process, they said, could take a number of weeks to complete.
A marketer, who spoke to our correspondent on telephone from Apapa, Lagos, which is a major petroleum products supply hub in the country, said when payments for the subsidy arrears were eventually made later this month, concluding transactions on fresh product supply from the international market was likely going to linger until December.
“For the fact we have (marketers) stopped importation of product for some time now, there is obviously a huge gap in the supply. This gap must be closed for us to have normalcy in the supply chain. Truly, I don’t see this normalcy returning by December given the current happenings,” the marketer said.
The Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, who also spoke to our correspondent, said the supply situation was unlikely to see much improvement as marketers’ confidence in the government had seriously eroded.
According to him, aside from ensuring that the recently approved subsidy payments finally get to marketers, the government needs to reassure marketers of its commitment to keep to the product supply and distribution terms.
Korodo said, “Although approval had been made, the actual payment of the subsidy arrears is a different ball game. With the way things are at the moment, it will take between three and four weeks for us to have a normalised market.
“As we speak, some marketers are still cautious when it comes to importing product under the subsidy scheme. Government needs to build the confidence of marketers so that they can fully go back into the business. Otherwise, the scarcity situation might soon become unbearable.”
Two marketers, who spoke to our correspondent from Abuja, where they are on a mission to get their subsidy payments, said it would take a while before the payment is cleared following some process constraints.
One of the marketers, who spoke on condition of anonymity, said after the payment of the N413bn claims to marketers, they (marketers) would be left with another major issue of getting forex conversion, since the Federal Government would be paying in naira.
The marketer said, “In recent times, we have been having issues with getting enough forex for our deals. Nothing has changed in the regard. Now, we have a huge sum of N413bn entering the system. Loans will be paid in forex as well as payments for products from international suppliers.
“The Central Bank of Nigeria is not giving us a clear directive in this regard. We will need forex, but we do not know where to get it in this quantum. Right now, the truth is that marketers don’t know how to source forex with the recent CBN provision.”
The Executive Secretary, Major Oil Marketers Association, Mr. Thomas Olawore, did not respond to calls made to him by our correspondent.
But a director in one of the major oil marketing firms in Nigeria said that given logistic constraints among other value chain problems, supply challenges were not likely to end before December.
The Minister of State for Petroleum, Dr. Ibe Kachikwu, on Wednesday said President Muhammadu Buhari was seeking the approval of the National Assembly to pay the N413bn subsidy claims to oil marketers.
But the Nigerian National Petroleum Corporation said on Friday that it had enough volume of petrol in stock to satisfy the nation’s domestic consumption, noting that the prevailing fuel queues in some major cities across the country had nothing to do with lack of supply of petroleum products.
The Executive Director, Commercial of the Pipeline and Products Marketing Company, Mr. Justine Ezeala, stated that a projected volume of 1.4 billion litres of petrol was available for distribution to fuel stations across the country all through the month of November.
He said as part of measures to tackle the ‘artificial scarcity’ the PPMC had increased the volume of petrol being trucked out to filling stations, adding that most of the 37 NNPC Retail Mega Stations across the country had been directed to commence 24-hour service.