The Federal Government on Thursday said it paid N156 billion to oil marketers as it to prioritises payments due to revenue constraints, bringing total payment to over N500 billion in five months, including over N300 billion in two instalments in December last year and N31 billion in interest differentials recently.
This is as scarcity of petroleum products, particularly Premium Motor Spirit (PMS) popularly known as petrol continues in major cities across the country, particularly Lagos and Abuja, where black marketers are now having a field day.
A statement by the Federal Ministry of Finance, through the Special Adviser to Dr. Ngozi Okonjo-Iweal, Coordinating Minister and Minister of Finance, Paul Nwabuikwu, in Abuja, said the latest payment comprising `I owe you’ (IOU), given in March and interest on payment.
A further breakdown, he said, shows that “the first consists of the cash backing of the N100 billion IOU which the marketers were given in March. The second is N56 billion in interest payments for the marketers according to the PPPRA template.
“This leaves a balance of N98 billion certified by PPPRA as the amount owed the markers,” it stated.
Okonjo-Iweala, in the statement, urged the marketers to appreciate government’s efforts to meet up with payments and reciprocate with some understanding of the situation of Nigerians who should not suffer more.
This, she said, can be done by sustaining the distribution and supply of fuel to end the suffering of Nigerians at fuel stations.
“The Federal Government has made maximum effort, in spite of the well-known fact that the fall in oil prices has significantly reduced national revenues, to prioritise payments to marketers.
“For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and cooperation in which we have always tried to engage them,” she said.
Speaking with via telephone with the News Agency of Nigeria (NAN), Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Obafemi Olawore, appreciated the gesture and commended the Federal Government for fulfilling its promises.
Olawore, however, said the association would not take any corresponding action until its members received payment alert from their respective banks, adding that the association was ready to commence importation and distribution of fuel to end the suffering of Nigerians at fuel stations once the money hit their accounts.
He warned that members of the association would not work with any paper promise without cash backing.
Meanwhile, increased oil supply from Nigeria, Iran and Saudi Arabia raised oil output by the Organisation of Oil Exporting Countries (OPEC) in April to a record high of 31.04 million barrels per day.
According to a survey conducted by Reuters, OPEC oil supply in April jumped to its highest in more than two years, boosted by OPEC’s largest African producer, Nigeria, which shipped more cargoes in April, helped by a return to a more typical export rate from its largest crude steam, Qua Iboe.
The survey noted that record or near-record supplies from Iraq and Saudi Arabia also led to the increase in OPEC supply in the month of April.
The report noted that the increase from the Organization of the Petroleum Exporting Countries puts output further above forecasts of demand for OPEC oil in the first half of the year, saying that although second-half demand is expected to be stronger.
According to the survey, OPEC supply rose in April to 31.04 million barrels per day (bpd) from a revised 30.97 million bpd in March, based on shipping data and information from sources at oil companies, OPEC and consultants.
An analyst at Commerzbank in Frankfurt, Eugen Weinberg, was quoted as saying: “We are in an oversupplied market, and this oversupply is unlikely to disappear any time soon.”
The report said if the total remains unrevised, April’s supply would be OPEC’s highest since 31.06 million bpd in November 2012.
The report also noted that besides Iraq, the main reasons for the rise are higher Nigerian exports and a further small gain in Libyan production despite the unrest there, noting that top exporter, Saudi Arabia, has kept output near a record high in April.
The survey noted that Iraq has increased its northern exports further following a deal between Baghdad and the Kurdistan Regional Government, offsetting a slight decline in flows from the south which produces the bulk of Iraq’s oil.
The survey also disclosed that Iraqi exports in April look set to exceed March’s record high of 2.98 million bpd, saying that Iraq was hoping to reach 3.1 million bpd of exports in April.
Iran, it said, increased exports as some buyers who stayed away in March in response to U.S. pressure during negotiations on a preliminary nuclear deal, resumed purchases in April, adding that there was not a corresponding increase in Iranian production in April, but said the extra barrels were shipped from storage.
The report also noted that Saudi Arabian output dipped after a rise in March to a record high, but remained above 10 million bpd due to increased local requirements in power plants, quoting Saudi Oil Minister, Ali al-Naimi, as saying that April output was “around” 10 million bpd.
The report also noted that Riyadh was the driving force behind OPEC’s refusal last year to prop up prices by cutting its output target of 30 million bpd, in a bid to discourage more costly rival supplies, noting also that Angola was one of the countries with lower output, attributable to outages at BP’s Saturno and Plutonio fields in the country.
Meanwhile, the survey by Reuters has also disclosed that West African crude oil exports to Asia are set to drop by about 15 percent to 1.99 million barrels per day (bpd) in May, down from the 2.34 million bpd initially planned for April.
The May figure, according to the survey, would be the second-highest monthly total this year, despite the fall from the April, when the highest level of exports to Asia were recorded.