PETROAN clarifies N100bn grant request to President Tinubu, emphasising it as a loan for fuel marketers, not free money, to counter subsidy removal effects.

[dropcap]T[/dropcap]he Petroleum Product Retail Outlet Owners Association of Nigeria (PETROAN) has clarified its recent request to President Bola Tinubu for a N100 billion grant, confirming that the money is intended to be a loan and not free funds.

The clarification follows widespread confusion regarding their original request, which was made to help retail marketers navigate the challenges arising from the removal of fuel subsidies.

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PETROAN President Billy Gillis-Harry explained that the funds would be used as seed capital in an energy bank, providing low-interest loans to marketers.

“We didn’t ask for free money; we want the N100bn placed in Nigeria’s energy bank,” Gillis-Harry said. “This money will be offered to us as a single-digit interest loan, enabling us to reduce fuel prices and sustain our businesses.”

This request stems from the sharp rise in fuel prices following the full deregulation of the downstream sector.

The removal of subsidies in 2023 led to significant cost increases, including the cost of lifting a 33,000-litre truck of fuel, which jumped from N7 million in May 2023 to N30 million in October 2024. Many marketers have been unable to afford such increases, resulting in some businesses closing.

PETROAN warned that without governmental support, as many as 10,000 retail outlets could be forced to shut down, leading to widespread job losses in the sector.

In his interview, Gillis-Harry highlighted the challenges marketers face due to the high interest rates charged by commercial banks.

He compared the current bank loan interest rates of 36% to 40% with the significantly lower interest rate PETROAN aims for, which would help reduce fuel costs.

“At 9% interest, the business environment would drastically improve, and the Nigerian consumer would benefit,” he stated.

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN) also called for the establishment of a dedicated oil and gas bank, similar to the Bank of Industry, to cater to the unique needs of the sector.

Vice President Hammed Fashola argued that such a bank would understand the industry’s dynamics and be better equipped to provide financial assistance to marketers.

Gillis-Harry also recommended continued investment in critical infrastructure, including refineries, pipelines, and storage facilities, to improve Nigeria’s refining capacity and reduce reliance on imported petroleum products.

He further stressed the need for the government to support indigenous companies, invest in research and development, and promote the adoption of compressed natural gas (CNG) as part of Nigeria’s energy strategy for 2025.

On cross-border smuggling, the PETROAN president suggested that the government work with neighbouring countries to strengthen border security and prevent illicit activities.

He also called for the use of digital tracking systems to monitor petroleum products from refineries to retail outlets.

To boost local fuel production, PETROAN recommended prioritising local refineries for crude oil supply, which would enhance Nigeria’s refining capacity and energy security.

Reflecting on the past year, Gillis-Harry noted that 2024 had been a pivotal year for Nigeria’s downstream sector, citing the rehabilitation of the Port Harcourt Refinery and the launch of the Dangote Refinery as significant milestones.

He called for the privatisation of the Warri and Port Harcourt refineries to further strengthen Nigeria’s refining capacity and reduce dependence on imported fuels.

Source: Read more at thecable.ng