The federal government is still incurring huge bills to bridge petrol despite removing subsidy on the product, findings have shown.
Bridging claims, a major component in the distribution margins, are paid as reimbursement to marketers for losses incurred as a result of sale of petroleum products at uniform prices nationwide.
Government had last month jerked up fuel price stating that any Nigerian firm could now import the product and sell at the price band of between N135 and N145.
Expectations were that government had stopped payment of every component in the subsidy scheme but the Petroleum Equalization Fund Management Board (PEF MB), the agency responsible for disbursing bridging claims to marketers said bridging claims are still being paid so that products could be moved to other parts of the country especially further North.
Spokesman for the agency Mr. Goddy Nnadi said as long as bridging is still within the Petroleum Pricing Regulatory Authority (PPPRA) pricing template, government will still be paying marketers.
He added that as long as products are still being moved by road, the cost incurred by marketers to bridge products from depots to filling stations would still have to be borne by government.
“Of course it has to be paid; there are various modes of transportation of products if we have good inland waterways some of them would have been moved by barges which were the original plan,” he said.
The National Treasurer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Barrister Dibu Aderibigbe, said that as much as government wants uniform price throughout Nigeria, the claims will still have to be paid.
“But if price can be varied from state to state then the role of PEF will be watered down,” he said.
Recall that the Minister of State for Petroleum, Ibe Kachikwu on May 11, 2016 announced the deregulation of the downstream sector of the petroleum industry, effectively ending fuel subsidy. The move resulted in increment of pump price of petrol from N86.50 a litre to N145.
