The Federal Government yesterday moved to enforce the regulated pump price of petrol at N87 per litre days after a biting scarcity, occasioned by the disruption of the supply system, forced price to rise as much as N500 per litre. The Department of Petroleum Resources (DPR), in a statement, warned filling stations against selling above the official pump price or risk being shut down.
The DPR's position came a day after a deal by fuel marketers and the Federal Government led to the restoration of lifting the commodity, leading to the easing of the fuel short age that worsened in the last two weeks. However, a former Governor of Abia State, Dr. Orji Uzor Kalu, has considered the deal between the marketers and government as a short-term solution to the frequent fuel shortage in Nigeria and called on President Goodluck Jonathan to urgently remove subsidy before he hands over to the President-elect, Major General Muhammadu Buhari, on Friday.
This came as the Depot and Petroleum Products Marketers Association (DAPPMA), an association of marketers and importers, disowned one of its members, Capital Oil and Gas Limited, for being "mischievous," over claims that the association was on strike, an allegation, he claimed caused fuel scarcity.
The DPR, in a statement by its Head Public Affairs, Dorothy Bassey, tasked Nigerians to report any marketer who sells the product above the regulated price to its officials or law enforcement agents. "While the Department of Petroleum Resources (DPR) is making every effort to ensure that fuel is available and reaches every part of the nation, it is hereby emphasised that the Federal Government has not increased the price of fuel. "The price remains at N87. Any station caught selling above the stipulated price, will have its licence revoked.
"No station should sell in jerry cans as there is enough fuel and for safety reasons. Any station caught dispensing into jerry cans will be sealed. "We ask that the public exercise caution and cooperate with all guidelines and processes for the safety of all," it said.
However, in his reaction to the fuel crisis, Kalu, while calling on the president to float fuel price, said if Jonathan should fail to stop the subsidy regime, which has cost Nigerians over N6.354 trillion in the last five years, Buhari should implement it immediately he is sworn in on Friday. Kalu, in a statement yesterday, said: "The Federal Government has spent N6.354 trillion as subsidy on petroleum products in the last five years, when President Goodluck Jonathan assumed leadership of Nigeria. Penultimate week, it paid N156 billion to oil marketers, bringing total payment to over N500 billion in five months, including over N300 billion in two instalments in December last year and N31 billion in interest differentials recently. "In 2010, a total of N673 billion was paid on subsidy, rising significantly to N1.3 trillion in 2011, before being revised upwards to N2.19 trillion by the Ministry of Finance, after arrears were paid in 2012 for products consumption in 2011.
"In 2012, the sum of N888 billion was allocated to subsidise petroleum product imports in the budget, but in December, a supplementary budget of N161.6 billion for payment of arrears of fuel subsidy was submitted by the president and later approved by the National Assembly. "By the following year, 2013, the government earmarked N971 billion for petroleum subsidy.
For 2014, the Federal Government again budgeted N971.1 billion for payments of subsidy, keeping it at the same level with that of 2013. "Though, despite insinuations and reports that there was no provision for fuel subsidy in the 2015 budget, the Senate Committee Chairman on Finance, Ahmed Makarfi, cleared the air, saying that a total of N100 billion was provided for as subsidy for Premium Motor Spirit (PMS), while N43 billion was approved for Dual Purpose Kerosene for the 2015 fiscal period. "You can imagine what the N6.345 trillion spent on subsidy can be used for in terms of infrastructural development in this country." According to Kalu, it is high time Nigeria stopped wasting public funds on subsidy, which benefits only the rich. He described the fuel subsidy regime as nothing but fraud, which is only benefitting a few people.
"The subsidy is not benefitting the poor because the marketers smile to the bank after collecting the full benefit on the over 40 million litres of products (PMS and DPK) consumed by Nigerians per day, leaving a lopsided distribution network, where not all Nigerians are able to get the products at the regulated price of N87 per litre. "In fact, a recent study showed that it is only in Lagos and a few urban centres that the products are sold at regulated prices.
The larger chunk of the populace buys the product still at exorbitant prices despite subsidy." Kalu, who lamented the agony and suffering Nigerians who voted Jonathan into power four years ago have had to go through, said the subsidy regime could not be sustained. Besides, he urged the Jonathan administration to stop playing politics with the apparatus of government by using it to intimidate and embarrass innocent citizens. Rather, he said, such agencies should be used to fight corruption. "All these intimidation is damaging a lot of serious business people in this country.
The Economic and Financial Crimes Commission (EFCC) knows who those corrupt people are and where to get them. How would a public officer wake up one day and buy a house in Maitama and hop on private jet every minute? Nigeria should get serious," he added. Meanwhile, DAPPMA in a statement yesterday by its Executive Secretary, Mr. Olufemi Adewole, criticised Mr. Ifeanyi Uba's Capital Oil and Gas Industries for its claim that marketers were on strike. It said the company was being mischievous as it "had been disqualified from the Petroleum Support Fund (PSF) scheme by the government regulatory agency and does not import PMS (petrol)."
"The company is not owed a kobo under the 'PSF scheme as they cannot make any claim, hence they do not feel the impact of non-payment of subsidy reimbursements; instead, the company stores petroleum products for NNPC/ PPMC under a 'throughput arrangement' as do a few other members of our association," it added.
It was also learnt yesterday that the outgoing government has agreed to pay $800 million debt to fuel marketer to resolve the fuel crisis crippling the economy. The ABC News, in a report, quoted an Independent Petroleum Marketers Association of Nigeria (IPMAN) source to have said that the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, agreed on Monday to pay the marketers the $800 million. There was no immediate statement from the minister, who accused the suppliers of holding Nigeria to ransom over the disputed debt, bemoaning, "so much fraud allegations and scams in this business of oil marketing."
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