On Wednesday, the Natural Oil and Gas Suppliers Association of Nigeria, or NOGASA, said that its members lacked the funds to pay differentials because the price of a petrol tanker had unexpectedly increased to N25 million from N7 million prior to the elimination of fuel subsidies.
In spite of the group’s unwavering support for the elimination of subsidies, Mr. Bennett Korie, National President of NOGASA, stressed that it is important to take into account the challenges posed by the removal when speaking to journalists at a global news conference in Abuja.
He expressed regret at the high interest rates on bank loans, which sometimes reach 30%, and he questioned where marketers would get money to continue the distribution of Petroleum products across the country.
He urged the Federal Government to pay marketers their outstanding of the Petroleum Equalization Fund (PEF) to boost their Capita and enable them stay in business.
According to him: “We are 100 percent in support of subsidy removal, but you know that everybody is talking about subsidy removal but they don’t talk about the problem behind the subsidy removal. It is good to remove subsidy but there are things that people don’t know, for instance, some of the marketers don’t have the money to pay differentials.
“This is because in less than an hour that Mr. President announced the removal of subsidy, the price changed and that affected a lot of marketers. We are talking about millions of naira. Before the removal, a tanker of fuel was selling for about seven million, but in less than an hour, it went up to 25 million naira, where is the money. As we speak, marketers are rioting in Port Harcourt and Warri. There are crisis there, they are not happy. Where are they going to get this money, from the bank, banks are giving loans at 30 percent, so where is this money going to come from, that is a fresh problem that no body is talking about. Subsidy was removed without considering some of these problems, at same time, Before now, we have this PEF. but they are not paying the marketers. There is no money, where do we get the money? Therefore, I want to use this opportunity to appeal to government to please pay marketers their PEF, so that they will continue in business, if it is not paid, we would not get fuel to sell.
“It is important for Nigerians to know that marketers do not have this money to pay, even though we support the removal, we have no choice. Because there is every need to pay this PEF, very very important” he said.
Korie also appealed to the government to expedite actions on repairing roads, adding that merketers are loosing a lot of products due to bad roads.
“Again, the issue of roads, is another big problem that we are facing. Last year, I spoke about this road, today, the problem is still there. I am not saying that government is not trying, they are trying, there is no doubt about that, but some of these roads are very bad, we are losing products. So, if you remove subsidy, use that money to fix the road, it is important, not just to remove subsidy, also make it is easy for us to do this business. Pay the PEF, fix the road and again, the issue of interest in the bank, we are talking about 28 or 30 percent to borrow money from bank, it means we are working for the banks, the marketers are working for the banks, where are they going to get the 13 million naira differential to pay NNPC. I also want to use this opportunity to appeal to NNPC to note the marketers paid three months upfront for the products, before this subsidy removal.
“Now you are telling the marketer to come and pay the difference. Where are they going to get that money, be fair to marketers. Allow us to load our products at the price we paid before the removal of subsidy, because we are expected to load when we pay. Now we paid upfront, so, allow us to load our products at the old price.
“Removing subsidy is not the problem but it will suffer us, we are the traders, we are the one bringing the product to the stations, give us that chance to load our products.
“I also appeals to my fellow marketers to consider, they are considering because.. NNPC Ltd today is a private company, they are like us, but we know that it is government that floated it, however, they should also understand that we are also business men, they should consider that because it is very important, to allow marketers to load their product at old price. I am also harmering on the issue of diesel cost, If the diesel is high, expect the PMS to be high. The only way out is to give priority to diesel, because that is what everybody use for industry, construction companies, etc. Even the transport, you cannot use PMS to load any product, it is diesel that you use, so priority should be given to diesel. Tell CBN to give priority to diesel importation not just PMS, it is very important because when it is cheap, it will also make the PMS to go down. We want the price of PMS to go down, that price is not fair to Nigerians, of course, I am a Nigerian, the price is high. If we want to lower the price, we must bring down the price of diesel, it will also help the economy, not just subsidy removal, we need to consider this area too, very important” he stated.