The Federal Government’s petrol subsidy bill has dropped from over N1.9 billion recorded in September to N1.6 billion in December based on the estimated daily consumption of 36 million litres of the product. Petroleum Products Pricing Regulatory Agency, PPPRA, statistics showed that government’s subsidy, which stood at N53.53 per a litre in September has fallen to N46.63 per litre.
The latest pricing template of the agency indicates that the landing cost, including cost and freight, traders’ margin, lightering expenses, NPA, financing, jetty depot throughput charge, and storage amounted to N128.14.
It stated that distribution margins, including monies due to retailers, transporters, dealers, bridging fund, marine transport average and admin charge amounted to N15.49.
The PPPRA which puts ex-depot price at N81.51 stated that these expenses increased the total cost of the product to N143.63 per litre.
This means that the Federal Government fuel subsidy is N46.63 per litre because the price of the product remains pegged at N97 per litre.
Investigations showed that the major and independent marketers have started preparing their fourth quarter subsidy claims for submission to PPPRA for settlement.
While the major marketers, including Oando, Forte Oil, MRS, Mobil, Total and Conoil were paid for the first, second and third quarters of 2013, others, including the independents have not been paid for the last quarter of 2013.
The Executive Secretary of Major Marketers Association of Nigeria, MOMAN Mr. Timothy Olawore, who expressed appreciation to the Minister of Finance, Dr. Ngozi Okonji-Iwela for the speedy payment said, “We need to thank the government agencies, especially the ministry of finance that facilitated the payment.
He said: “We are hopeful that the fourth quarter subsidy will be paid as soon as operators submit their bills. This is important to enable marketers supply adequate fuel to the market.
Olawore said efforts should also be made to settle outstanding debts owed to others, especially members of Independent Petroleum Marketers Association of Nigeria, IPMAN and Depot and Petroleum Products Marketers Association, DAPPMA.
He said although the majors operate both tanks farms and retail outlets, all classes of fuel marketers occupy important positions in the distribution and marketing of fuel and other petroleum products.
Olawore, who confirmed the availability of fuel in Lagos and other parts of the nation said the situation can be sustained if the government would continue to pay marketers as when due.
It was learnt that the government may not experience any difficulties in paying the marketers as provision for the settlement was made in the 2013 budget.
The situation seemed to have improved greatly from the past when government was not able to settlement many bills of the marketers.
However MOMAN has urged the government to respect the 45 days window for settlement of subsidy bills as agreed upon with the fuel importers.
MOMAN stated that: “There is a need to point out that it took a long time for the government to make previous payments. So far, only N9.4bn has been paid for 2013, a development which puts a lot of financial burden on our members.
“Also, interest charges have eaten deep into our meagre reserves, and there may be no other option than to start staff rationalisation.
“At the peak of the crisis, government promised to pay us as soon as the probes were over. But it took a long time before they started to pay, and this led to the accumulation,” the association stated. Click to signup for FREE news updates, latest information and hottest gists everyday
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