The Major Oil Marketers Association of Nigeria (MOMAN) has condemned the 0.75 per cent to N50 Point of Sales (PoS) charges currently levied on merchants by Central Bank of Nigeria, saying in other liberalized sectors such costs are passed on to the end-user, who ultimately in any business, pays for all the cost.
Reacting to the publication exclusively published by The Daily Times on Monday, 6th of January, 2020, “PoS transactions charges: Oil merchants bemoan 0.75 per cent charges on dealers”, the Chief Executive Officer/Executive Secretary, MOMAN, Mr Clement Isong said, between the government, Oil Marketing Companies (OMCs) and the general public, that it does not appear to be a clear winner in this tussle.
“The N50 stamp duty imposed on merchants, most especially dealers at filling stations, is without a doubt unsustainable and as per the Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template, the dealer’s margin is fixed at N2.36 per litre”, he fumed.
He reiterated that, the margin is meant to cover all the dealer’s overhead costs as well as the running costs of the filling station.
While buttressing the plight of oil merchants, Isong emphasised that, If the dealer is made to absorb the N50 stamp duty charge, it would mean that the dealer can only begin to make a profit only after selling his first 22 litres of petrol on every transaction, he added, this in an environment where the average off-take at filling stations is less than N2,000 or approximately 13 litres.
He stressed that, the margins are not enough to cater for all the costs associated with running the filling stations and imposing stamp duty may result in the dealers having no other option than to close down their business.
The MOMAN boss stressed that the last margin review by the government was done way back in 2016, despite that the country has experienced an average annualized inflation rates of approximately 12 per cent.
He noted that key stakeholders have engaged and will continue to engage with government on the need for an upward review of margins.
“We understand and appreciate the need for the government to find avenues to generate revenues for the country. However, for any policy that will affect the downstream industry, the environment and regulations guiding the sector will have to be taken into consideration”
“With the fixed margins and the decision of the government not to increase the pump price of petrol, the petroleum industry must be exempt from this stamp duty charge, as the industry cannot afford to absorb any additional costs not provided for on the pricing template” he averred.
Isong disclosed that the government has been successful in ensuring fuel availability and the security of supply throughout the country and it will be unfortunate if this success is marred by the burden surrounding the imposition of stamp duty charge.
“We at MOMAN believe that through an effective dialogue between the government, industry players and key stakeholders, a lasting solution to this quandary can be found” he added.
It would be recalled that the apex bank in December 2019, had said N50 being charged Nigerians who use PoS machines for transactions is a misinterpretation of its directive by rogue merchants. Hence, it urged customers not to pay N50 charge to businesses for using it.