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Fuel Scarcity: Buhari Rejects Marketers’ Demand For Price Increase - News - NaijaGrows

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Fuel Scarcity: Buhari Rejects Marketers’ Demand For Price Increase by sherifastro(m): 10:32 pm On 12 Dec 2017
Pressure on government to effect a rise in
petroleum price from N145 per litre is
coming amidst the current acute fuel
scarcity
- Marketers are said to be unwilling to
import products because of low or
insignificant profit margin.

President Muhammadu Buhari is said to
have rejected a subtle move by
marketers for the federal government to
increase fuel price.

The president has also rejected the re-
introduction of fuel subsidy.
The pressure on government to effect a
rise in petroleum price from N145 per
litre is coming amidst the current acute
fuel scarcity across the country, the
Nation reports.

Government sources claim the
administration is concentrating on
finding permanent solutions to the
recurring fuel crisis including
checkmating sabotage by some
marketers and stakeholders, and putting
all the nation’s 23 depots in 100 per
cent shape.

Marketers are said to be unwilling to
import products because of low or
insignificant profit margin and are
subsequently seeking full deregulation
of petroleum products.

One of the sources said: “The key issue
is price war. The marketers have made
representation to the federal government
and the Minister of State for Petroleum
Resources, Dr. Ibe Kachikwu to allow
price hike of petroleum products and
leave the sector to market forces.
“The President and senior government
officials are however opposed to price
hike because of its spiral effects on the
socio-economic life of the nation. It also
has grave political implications for the
survival of the present government.

“In the last few months, the government
has been trying to cope through the
Nigerian National Petroleum
Corporation (NNPC) until there was
stress in the supply chain following
threats by PENGASSAN and the challenge
in Lagos.”
Another stakeholder, speaking on the
price war, said: “We import refined
products as a nation. Once the prices of
crude increase at the international
market, they have effects on the cost of
refined products being brought into our
country.
“The landing cost of Premium Motor
Spirit (PMS) is between N165 and N170
per litre. The marketers are claiming
that the profit margin is insignificant
and they cannot recover cost, they say
they need to top up prices since they no
longer enjoy subsidy.
“Initially, the same marketers said they
had subsidy arrears to collect from the
government and they will not import
products. The arrears have not been
appropriated for by the National
Assembly and there was nothing the
government can do.”
But a government source said: “To
mitigate the issues raised by the
marketers, this administration put some
measures in place. For instance, the
government created a special foreign
exchange window for the marketers to
enable them to import products.
“Instead of using the forex, some of them
diverted it to other use. In order not to
hold the nation into ransom by the
marketers, NNPC in the last one and a
half years has been importing 99.9% of
products. This sole importation also
drains the resources of NNPC but it has
to sacrifice to ensure availability of
products.
“And if NNPC imports, it sells to
marketers but they are still complaining
of low profit margin. The importation
chain has its own stress because for the
storage of the products, NNPC can only
accommodate 55% of the products. The
oil majors cater for 30% and independent
marketers take charge of about 15%. So,
at any point, these marketers are still
needed.
“The alternative is for all the nation’s 23
depots to be operating at maximum
capacity to check the antics of the
marketers.”
The news outlet also quoted a minister
saying that the government was
suspecting sabotage by some
stakeholders.
“Before the present crisis, the nation
used to consume between 30million to
35million litres of Premium Motor Spirit
(PMS) daily but since this current
challenge started, the consumption has
shot up to 80million litres per day.
“Without a soothsayer, it is obvious that
something had gone wrong. We cannot
just rule out sabotage including
diversion of products.”
The president met with the NNPC boss
on Saturday, December 23 in order to
find a solution to the issue of fuel
scarcity.
Many Nigerians have been complaining
about the scarcity with some raising
suspicion that it was an attempt to
increase price of fuel.
It was reported that the president said
he was concerned about the plight of
Nigerians.
In a video address, Baru blamed the
situation on oil marketers whom he
accused of hoarding the commodity.
He assured Nigerians that there was no
plan to increase price of fuel and that
work was going on to end the crises
soon.

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