The latest Petroleum Products Pricing Regulatory Agency, PPPRA, statistics showed that government’s subsidy, which stood N55.21 in August has fallen slightly to N53.53 per a litre.
The latest template of the Petroleum Products Pricing Regulatory Agency showed that landing cost, including cost and insurance, traders margin, lightering expenses, NPA, financing, jetty depot thru put charge and storage charge amounted to N135.04 while sun total margins, including retailers, transporters, dealers, bridging fund, marine transport average and admin charge amounted to N15.49, thus increasing total cost to N150.53.
A PPPRA source explained in a telephone interview that the subsidy level was a reflection of high prices of crude oil at the volatile global market.
These included OPEC basket such as Saharan Blend (Algeria), Girassol (Angola), Oriente (Ecuador), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Qatar Marine (Qatar), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela) which price is presently in excess of $100 per barrel.
Consequently, global refiners who export petroleum products, including petrol to Nigeria have in recent times incurred higher costs in the process of procuring, refining and shipping products to Nigeria and other parts of the world.
The costs, it was learnt have been passed to net importing nations, including Nigeria which have over the years resorted to increased fuel importation to meet domestic demand because of the inability of local refineries to refine adequate fuel for its citizens.
The government which budgeted to spend N972.138 billion on fuel subsidy this year has not yet paid importers this year.
The Executive Secretary of Major Marketers Association of Nigeria, MOMAN, Mr. Timothy Olawore confirmed that major marketers of petroleum products have petitioned the Federal Government over the delay in the settlement of N65bn fuel subsidy debts.
The marketers, including Mobil, Total, MRS, Forte Oil and Conoil, speaking under the aegis of the Major Oil Marketers Association of Nigeria, MOMAN, said that the delay in the settlement of their subsidy bills had affected their operations.
In a letter sent to the Minister of Finance, Dr. Ngozi Okonji-Iwela; the Minister of Petroleum Resources, Mrs. Diezani Alison- Madueke and Executive Secretary, Petroleum Products Pricing Regulatory Agency, PPPRA, Mr. Reginald Stanley, MOMAN urged the Federal Government to clear the outstanding debt.
The association urged the government to respect the 45 days window for settlement of subsidy bills as agreed upon with the fuel importers.
MOMAN Executive Secretary, who confirmed the development, stated that the letter was the second to be sent to the authorities on the matter.
He 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.
Olawore remarked that: “Also, interest charges have eaten deep into our meagre reserves, and there may be no other option than to start staff rationalisation.”
But this could have a negative impact as available data showed that the majors are the second largest importers of petrol, after the NNPC, while the independent marketers complement imports with whatever quantity they could bring in.
The Federal Government had tightened procedures for subsidy payments after a legislative probe last year revealed widespread fraud in the system.
“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,” he added.
He stated that: “But they (government) are not following the 45 days agreement. From January 2011, when the subsidy crisis started till early June, nothing was paid to us until we started making noise and they started paying from mid-June.
Information from National Mirror was used in this report.