Long vehicle lines have emerged again on the streets of the capital Freetown as motorists line up outside fuel stations waiting to buy a few gallons.
Oil Industry officials have dismissed the long fuel lines which started developing Sunday evening as the result of “panic buying”
“This is because they have seen us holding meetings and some people may have misinterpreted this to mean that we intend to raise prices” the industry official explained
“Presently there are two million one hundred and sixty eight thousand (2,168,000) gallons of petrol which will take us up to December 3rd” he said adding that “NP (National Petroleum) has in stock some two thousand one hundred and sixty one (2,161) gallons which does not include what NP is offloading now”
TOTAL the official disclosed “has in stock three hundred and forty eight thousand (348,000) gallons”
In terms of diesel the official disclosed that there is in stock “one million six hundred and seventy six thousand nine hundred and eighty four (1,676,984) gallons which does not include the five hundred and eighty nine thousand three hundred and seventeen (589,317) gallons which TOTAL has.”
Oil Industry officials have been meeting with government officials over the increase of fuel pump prices for a long time now.
International fuel oil prices have risen to the unprecedented price of US$99 over the past months.
This increase started during the days leading to the August 11 elections. However the SLPP government officials then were reluctant to increase the prices even though the oil pricing formula had been triggered and should have resulted in an increase in the pump price.
Oil industry officials fearful of being blamed for the political fall out the rapid increases in consumer goods as a result of the fuel price increases would have caused, backed down and agreed to wait after the elections.
The losses suffered by the oil companies became compounded when the elections had to go into a run off. Again talks were stalled. After the elections also it was decided to give the new government some time to settle down before discussing an increase which would definitely have far reaching implications for the populace.
At some point it was envisaged that the money in the strategic stocks fund which had run up to several billions of leones would be used by the government to starve off any talk of price increase in the short term.
Eventually after a brain storming meeting with the new President an agreement was reached which should have come into force on Monday 29th October 2007.
In this new agreement the government decided to forgo a lot of its taxes and charges so that the pump price would remain the same at least up to December when they hope the electricity situation would have improved easing the consumption of fuel for generators by households and some private enterprises.
Port charges which used to be $3 per metric tonne was removed or reduced to zero as was Freight levy which used to be $2 per metric tonne.
Road user charges were reduced from Le1,341 per gallon to Le250.50cents per gallon petrol and Le259.18cents per gallon diesel.
All payments to the strategic stocks fund was stopped and fuel oil which is mainly used by the National Power Authority (NPA) was increased from Le6,000 per gallon to Le6,813 per gallon.
The oil companies were also directed to start paying (the new) road user charges and the Le15 contribution to the petroleum fund.
This was because oil companies had stopped paying road user charges when they could not reach an agreement on the increase in the pump price and being that they were already selling at a loss.
Officials say that the agreement is tantamount to a “subsidy which will definitely be frowned upon by the World Bank or IMF” As we went to press meetings were still being held between oil companies and government officials at State House.