Nigerian Fuel Marketers Owed $315 Million in Fuel Subsidy

Nigerian Fuel Marketers Owed $315 Million in Fuel Subsidy

Nigeria’s main fuel marketers said late Thursday the government has yet to fulfill its pledge to settle Naira 60 billion ($315 million) in unpaid subsidy for gasoline imported in previous quarters, warning that this could cut supply and trigger a fuel shortage.

Finance Minister Ngozi Okonjo-Iweala in March promised to pay the marketers the debt, which was the extra cost incurred by the companies on the gasoline cargoes imported in 2014, and also to settle the arrears owed on subsidy payments.

The marketers through their umbrella body, Major Oil Marketers Association of Nigeria, said that the government had only paid the debt owed to three out of the six companies involved more than a month after the pledge was made.

“Regrettably, despite [the minister’s] commitment and assurances, the industry to date has only received approximately Naira 30 billion in forex differential claims out of the Naira 100 billion owed,” the group said in a letter addressed to the minister.

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“In the same vein, only Naira 345 billion has been received in core subsidy payments, covering payments up to the second quarter of 2014,” the marketers said.

In February, the marketers including energy firms Oando and Conoil, as well as the local subsidiaries of ExxonMobil and Total, reduced gasoline imports following continued delays on the part of the government in settling the subsidy debts. This triggered a fuel shortage in Nigeria.

The companies account for 40% of Nigerian gasoline imports. Nigeria Africa’s largest crude producer relies heavily on imports for its fuel needs. The government subsidizes the imports to keep domestic pump prices low.

The country’s four state-run refineries are currently operating at around 10% of their combined nameplate capacity of 445,000 b/d, as they undergo major rehabilitation, state-owned Nigerian National Petroleum Corp. officials have said.

Source: Platts


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