The presidency on Tuesday ordered the immediate payment of the N150 billion outstanding subsidy claims owed petroleum products marketers.
The order from the Presidency is coming amid speculations that government was considering increasing fuel price in the country in the face of rising fuel importation and distribution costs.
The speculations were fuelled by reports ahead of the scheduled meeting of the Board of the Petroleum Products Pricing Regulatory Agency, PPPRA, on Thursday to review the existing petroleum products pricing template fundamentals, among other issues.
Since May 2016, when the template was adjusted, raising petrol price from N86 per litre to between N135 and N145 per litre, prevailing market conditions have fuelled calls for further review of the retail pump price.
Global crude oil price, which rose from below $30 per barrels then to the current price of $52 per barrel, and the Central Bank of Nigeria foreign exchange policy have resulted in the scarcity of funds for petroleum marketers.
The rising cost of fuel importation had caused major and independent petroleum marketers to abandon importation of petroleum products for the Nigerian National Petroleum Corporation, NNPC, which accounts for more than 60 per cent of the total national stock.
A senior NNPC official said on Tuesday in Abuja that the corporation was bearing the bulk of the almost N90 billion cost incurred as subsidy on importation of petroleum products.
The official, who requested that his identity should not be revealed as he was not authorised to speak on the issue, said the cost was as a result of high landing cost, distribution margins and port charges by the Nigerian Maritime Administration and Safety Agency.
Ahead of the meeting of the PPPRA Board, close watchers of the market said the regulatory authority could be considering a review in the pricing template to allow for adequate accommodation of the costs to sustain importation of products.
But, the Nigeria Labour Congress President, Ayuba Wabba, in a telephone interview on Wednesday allayed fears by Nigerians about any plan by government to increase fuel prices, describing any such decision as a ‘no go area.’
“It is not true,” Mr. Wabba said of alleged plans by the PPPRA to take a decision during its meeting to raise fuel price.
“Nobody would dare go to that area. We have just finished a meeting this evening at the (Presidential) Villa on the issue, and it was very clear and emphatic that nobody would make any attempt to touch that issue.
“The meeting of the PPPRA Board would dare not include that on its agenda. It was clear at the meeting at the Villa that fuel price increase is a no go area. Even the petroleum products marketers are aware of this.
“Government knows that fuel price increase is a very sensitive issue at this time and therefore nobody should take Nigerians for a ride. It is commitment given by the Chief of Staff to the President, Abba Kyari, on behalf of the federal government.
“Every marketer, both major and independent, NNPC, PPMC (Pipelines and Petroleum Products Marketing, Company) were there at the meeting.
Mr. Wabba said the meeting, called to address the challenges in the shortage of diesel, kerosene and other products, also resolved to ensure that products were available across the country, particularly in the rural areas.
The meeting attended by all the relevant ministers, including those in charge of petroleum resources, labour and productivity as well as the Central Bank governor, resolved to take steps to encourage more involvement of other marketers in fuel importation.
“Government was very emphatic during the meeting that nobody should contemplate anything about increment in price of petroleum products,” the labour leader said.
Oil workers have said they would not accept another increase in petrol price at this time.
PENGASSAN President, Francis Johnson, said all the participants at the meeting would not like to go back on their pledge, describing any attempt to increase fuel price as “suicidal.”
Part of government’s efforts to encourage marketers to resume the importation of petroleum products includes the approval for the payment of the N150 billion Petroleum Equalisation Fund debt owed petroleum marketers.
The National Secretary of Independent Petroleum Marketers Association of Nigeria, IPMAN, Zarma Mustapha, said the money was part of the subsidy refund on the cost of distribution of petroleum products across the country.