The Nation Newspaper

Tag: MOMAN

  • Deregulation will attract more investments, says MOMAN

    Deregulation of the downstream sub-sector of the petroleum industry would attract more investments and enhance efficient operation of the industry, the Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore has said.

    Olawore also noted that for a quick realisation of such investments,  the National Assembly has to speed up the processes of passage of the Petroleum Industry Bill (PIB) into law, adding that a lot of investments have been diverted to other countries due to non-passage of the bill.

    He stated that Ghana, a neighbouring country, studied  Nigeria’s  PIB and copied some aspects of the bill,  adding that  Ghana has  deregulated its oil and gas industry, while Nigeria is yet to deregulate its own.

    Nigeria is still  debating the bill, years after its conception, he added.

    The MOMAN chief who spoke with The Nation in Lagos dismissed insinuations in some quarters,  that deregulation would increase the pump price of fuel.

    The removal of subsidy,  by the Federal Government, Olawore said,  has made it possible for fuel to be sold at different prices.

    He said there were fears that subsidy removal would bring about astronomical increase in fuel price, but the contrary is the case as some sell even below the officially approved price.

    Olawore maintained that deregulation would have a positive multiplier effect, adding that there would be healthy competition among marketers while also attracting more investment from wealthy individuals, which would in turn create the needed job opportunities for many Nigerians.

    The Chairman/Chief Executive Officer, Enfrasco Energy and Infrastructure Services Limited, Chukwuma Okolo, corroborated Olawore saying what Nigeria needed was a gradual series of changes where we would transit from a controlled petroleum price to a price that at least reflects the cost of production. He added that this is achievable.

    According to him, we have raised refining and petrochemical to almost a level that is not supported by business or economic reality. “We are just postponing the difficult times, in whose interest is petrol price regulated? Diesel is already deregulated, petrol is essentially for cars and smaller buses, which is mainly for city dwellers, so who are we protecting with regulation of petrol price?”

    Okolo, however, expressed hope that by the time the refineries are fully functional and Dangote refinery comes on stream, the country would be able to have over a million barrels daily refining capacity. But we don’t need to wait for that long, he said, adding the process to ensure that we fully deregulate should probably be a two or three years phase process.

  • Federal Govt, MOMAN disagree on N413b fuel subsidy

    Federal Govt, MOMAN disagree on N413b fuel subsidy

    THE last may not have been heard on the fuel subsidy claims by members of the Major Oil Marketers Association of Nigeria (MOMAN).

    A whopping N413 billion was last week approved by the Federal Government for the immediate payment oil marketers’ outstanding claims.

    The approval came in the wake of a brewing fuel shortage and stave off another harrowing experience of fuel scarcity.

    Barely a week after the approval, the Federal Government and MOMAN are not on the same page over the gesture.

    MOMAN, through its Executive Secretary, Mr. Obafemi Olawore, told The Nation on telephone, that foreign exchange differentials and interests on the loans they obtained from banks were not captured in the N413 billion.

    Lauding the government gesture, Olawore said MOMAN members’ subsidy claims have not been fully paid by the government.

    But Nigerian National Petroleum Corporation (NNPC) spokesman Ohi Alegbe disagreed with the MOMAN position.

    President Muhammadu Buhari, he said, approved far above the marketers’ debt portfolio, which he put at about N300 billion.

    According to him, the President magnanimously approved the N300 billion thresholds to take care of the members of the Independent Petroleum Marketers Association (IPMAN) and other importers involved in the chain of oil production.

    Alegbe said: “The total debt was about N300 billion but to take care of the independents and other importers as well as other costs such as foreign exchange differentials and interests on loans, government approved N413 billion for them.

    “Therefore, to say that the amount doesn’t cover the total debts owed the marketers, is just not being fair to the government.”

    An acute fuel scarcity in May almost grounded the economy as blue chip companies in the financial and telecoms sectors served their clients and customers notices on plans to close shop. Several flight schedules were cancelled due to non-availability of aviation fuel.

    Now that the Federal Government has approved more than the N300 billion being owed major marketers and depot owners, will fuel scarcity become a thing of the past in the country?

    In February, Olawore said the Federal Government’s indebtedness to marketers stood at N250 billion as at end of 2014. The amount included the debt owed Depot and Petroleum Products Marketers Association (DAPPMA).

    Mobil, Oando, MRS, Total, Conoil and Forte Oil are the members of MOMAN.

    Olawore said the association had at that time, written several letters and held consultations with the government for payment of their debt. The major marketers also requested for upward review of their distribution margins, which had been fixed at N4.60 per litre since 2007.

    The demand for increase in distribution margins, according to Olawore, was to cushion the effect of operational cost on members.

    He said the margins have become inadequate because the salaries of employees and the cost of building retail outlets have shot up, adding that the demand for increased distribution margins died with the immediate past administration.

    Olawore said: “MOMAN as at end of 2014 was being owed N250 billion in unpaid subsidies. Out of the N250 billion, N95 billion was the cost of foreign exchange (Forex) and interest on loans while the real subsidy for the marketers is N155 billion.

    “We have met with the government and they promised to pay but we have not heard from them since then.”

    DAPPMA’s Executive Secretary Olufemi Adewole identified soaring interest as the direct impact of the debts’ non-payment.

    He noted that the outstanding bill was a little above N200 billion in April when the Federal Government made the last payment, adding that by the end of May, the debt had risen to N291 billion.

    The major marketers and DAPPMA members are jointly owed the subsidy debt. Therefore, with the increasing interest on the loan, the debt will by now be well over N300 billion, he added.

    IPMAN’s President Chinedu Okoronkwo, however, noted that his members will also partake in the subsidy payment.

    The marketers have since May refused to import fuel. They insisted that until the government clears the arrears, they will not import, leaving only the NNPC as the sole importer.

    It (NNPC) has capacity to meet 50 per cent of the national demand of estimated 40 million litres per day of petrol.

    Alegbe said it would amount to an abuse of the President’s magnanimity if the oil marketers make further subsidy demands.

    Besides, he said the disagreement on subsidy had been lingering from the previous government but because the Buhari administration wanted a smooth flow and distribution of fuel, he approved N413 billion.

    According to him, government was verifying the 40 million litres daily consumption claim of the marketers, alleging that the figure would have padded up.

    He said daily consumption should be about 30 million litres or even less.

    NNPC’s Group Managing Director Emmanuel Ibe Kachikwu spoke of plan by the government to pay whatever is due to the marketers every month beginning from next year.

    “From next year, marketers will be paid their dues every month and the issue of payment of interest on loans and undue forex differentials would be eliminated,” Kachikwu said in Lagos last weekend.

    According to him, government’s target was to cut down fuel subsidy to between 15 and 20 per cent.

     

  • Fuel scarcity: FG, oil marketers resolve conflicts

    Fuel scarcity: FG, oil marketers resolve conflicts

    … –Products lifting to begin within six hours

    The Senate on Monday recorded a major breakthrough in its efforts to resolve the lingering fuel scarcity in parts of the country

    The upper chamber brokered an agreement between the Federal Government and oil marketers to ensure immediate lifting of available petroleum products by marketers in Lagos, Port Harcourt, Warri and Calabar depots.

    The Senate had mandated its joint committee on Petroleum Resources (upstream and downstream) to meet with stakeholders including the federal government to find immediate solution to the lingering fuel scarcity in the country.

    The resolutions were read by the Chairman, Senate Committee on Petroleum (Downstream) Senator Magnus Abe.

    Part of the resolutions reached at the well attended meeting included the immediate call off of the strike by the National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association (PNGASSAN).

    The resolution said the suspension of the strike was made possible due to the intervention of the Group Managing Director (GMD) of the Nigeria National Petroleum Corporation (NNPC), Dr. Joseph Dawha.

    The resolution also mandated the Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, to give an undertaking to the Major Oil Marketers Association of Nigeria (MOMAN) and Depot Owners Association (DAPPMA) that the work of the committee being headed by the Central Bank of Nigeria (CBN) and Petroleum Products Pricing and Regulatory Agency (PPPRA) will be concluded.

    The committee is charged with the responsibility of verifying the N200 billion MOMAN claimed the government owes its members.

    The resolution said if the committee “concludes its verifications of the outstanding claims before the end of the life of this administration, it would be reflected in the handover notes to the new President. “

    “If it is not concluded, then, the fact that such a committee was set up and is working, will be reflected in the handover notes and a copy of the letter, conveying the existence of this committee will be sent to MOMAN and DAPPMA and also, a copy will be sent to us in this committee.”

    It added that “On the basis of that agreement, MOMAN will offer whatever cooperation that is needed to enable lifting of petroleum products to begin nationwide within six hours.

    “MOMAN has also agreed to give a similar undertaking to National Association of Road Transport Owners (NARTO) to pay existing transport costs as has been determined by them.

    “MOMAN will give a written undertaking to NARTO and a copy will also be sent to this committee.

    “NARTO and its affiliates nationwide will commence lifting of petroleum products from available fuel depots within the next six hours.”

     

  • N264b subsidy payment for March, says MOMAN

    N264b subsidy payment for March, says MOMAN

    After a meeting with the Major Oil Marketers Association of Nigeria (MOMAN) on Monday, the Federal Government reached an agreement with the marketers to fully pay them (marketers) their outstanding unpaid N264 billion subsidy debt between this month and end of March.

    The Executive Secretary of MOMAN Mr. Obafemi Olawore told reporters yesterday in Lagos that members of the Association had a meeting with the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala to discuss mode of payment to encourage marketers to continue making fuel available in the country. At the end of the meeting, the minister assured that the debt will be fully paid by end of March.

    Olawore stated that the government last year paid the marketers N345 billion, which was subsidy for 2013 and part of 2014. He noted that the N264 billion currently owed the marketers comprises of the pending unpaid 2014 and January 2015 subsidies, foreign exchange and bank interests. According to him, part of last year’s and January this year’s subsidies is N164 billion while the accompanying foreign exchange differential and interest  on loans from banks is N100 billion, making a total of N264 billion.

  • NNPC releases 33 million litres of petrol for Lagos

    NNPC releases 33 million litres of petrol for Lagos

    In its determination to ease the discomfort being experienced by motorists and commuters in Lagos and its environs, the Nigerian National Petroleum Corporation (NNPC) yesterday supplied an additional volume of 33 million litres of  Premium Motor Spirits (PMS) to the Major Oil Marketers Association of Nigeria (MOMAN) for onward distribution to fuel stations across the metropolis.

    Acting Group General Manager, Group Public Affairs Division of the Corporation, Dr. Omar Farouk Ibrahim stated in a statement that the extra volume of 25, 000 metric tonnes of fuel, the equivalent of 33 million litres of petrol  was supplied to the marketers  as part of measures by the oil giant to end the artificially- induced scarcity.

    “While we intensify our ongoing direct monitoring of fuel stations across Lagos and its environs, we are providing the extra volume of product to eliminate the noticeable queues arising from the induced scarcity,’’ Dr. Ibrahim stated.

    The NNPC appealed to marketers and members of the public to refrain from hoarding and panic buying.

     

  • Oil marketers worry over delay in Q1 allocation

    Oil marketers worry over delay in Q1 allocation

    • Seek payment of N120b debts

    THE members of Major Oil Marketers Association of Nigeria (MOMAN) have expressed worry over non-release of the 2014 first quarter fuel imports allocation by the Petroleum Products Pricing Regulatory Agency (PPPRA).

    MOMAN Executive Secretary, Mr. Obafemi Olawore told reporters in Lagos yesterday that the delay could cause scarcity of fuel as no importer would import without directive from PPPRA, adding that imports from last quarter of last year were drying out.

    He said marketers had expected that the agency would have done the allocation at the end of last year considering the time it takes to book a cargo and its arrival in Nigeria. He advised that the industry should not be allowed to fall back to the era where only Products and Pipeline Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) was the only importer because it would create problem.

    He also said the government owes the major marketers N120 billion. The N120 billion, according him, is the main subsidy claims, which is N100 billion and N20 billion, which is accumulation of unpaid interests and foreign exchange differentials.

    He also appealed to the government to pay other importers because the delay in payment of their subsidies means that interests on loans obtained from banks continue to swell.

    He said: “We ended 2013 on very tall hope. Last year when we were paid our subsidy, we thought that the payment would continue. We imported products but as we speak, they (government) told us that the payments four third and fourth quarter imports subsidy claims are being processed. We hope the processing will end pretty soon, so that we get paid. We are owed third and fourth quarter subsidies reimbursement.

    “I will also want to plead on behalf of the other marketers who are still being owed subsidies with accumulated interest and foreign exchange differentials. Certainly it is not only major marketers that suffered penalty from the banks.”

    He added: “The main claims, which are subsidies for third and fourth quarters that are due for payments. Also at the closing of 2013, it was expected that first quarter 2014 import allocation should have been released knowing very well that it takes some weeks to book for a cargo and its arrival on Nigerian waters. First month of first quarter has almost ended which means that whatever we are getting is fallout from quarter four of last year.

    “I can say that non release of 2014 quarter one allocation is making us uncomfortable. Our view therefore is that it should be released immediately before previous imports dry out.”

  • N100b subsidy claims outstanding, say operators

    THE Major Oil Marketers Association of Nigeria (MOMAN) said over N100billion subsidy’s claims, excluding interest are outstanding.

    Its Secretary, Femi Olawore told The Nation that the amount would be higher when the cost of obtaining loans is factored in.

    He said operators borrow to finance the importation of petroleum products, adding that they are expected to pay an agreed interests on the facilities.

    He said the government has failed to meet its obligations of paying the fuel subsidies promptly, adding that the development is affecting their operations.

    He said the government has not been meeting its obligations of paying subsidies regularly to the 26 approved firms that import fuel in the country, urging that it should publish the names and the amount it has paid, adding that there has been conflicting reports on payment of subsidies.

    He said the association has tried to get the subsidies paid to the members to no avail.

    “We have written the government on the importance of paying the subsidies acruing to major oil marketers. We have told the government that deregulation is the final solution to the problems in the downstream sector,” adding that without deregulation, the players in the downstream sector will continue to experience operational hitches.

    He said once the sector is deregulated and the refineries are put to optimal use, the problem in the industry would reduce.

    Efforts to speak to Paul Nwabuikwu, the Special Assistant to the Minister of Finance, and Coordinating Minister for the Economy, Dr Ngozi Okonjo-Iweala on the issue proved abortive.

    However, the government said it has paid N240, 587, 579.248 to the oil marketers. It said N48, 085,299,281.50 was paid to 19 oil marketers in July, this year.