HomeAfrica-NewsLiberia Faces Potential Petroleum Shortage as Importers Hoard Products Over Pump Price...

Liberia Faces Potential Petroleum Shortage as Importers Hoard Products Over Pump Price Dispute

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MONROVIA – Liberia is on the verge of experiencing another shortage of petroleum products, but it is an artificial shortage resulting from hoarding by major importers due to an unsettled agreement with the government regarding a pump price increment.

Since the beginning of this week, motorists have been experiencing long queues at some filling stations around Monrovia. On Tuesday, Aminata filling station restricted the selling of petrol to only customers with coupons while PetroTrade and Connex claimed they were out of stock.

 

This situation is reminiscent of a similar occurrence at the beginning of the Weah-led government, which degenerated into an acute shortage that heavily impacted citizens and the economy.

However, FrontPageAfrica has learned that the ongoing scarcity is the result of coercion by importers and dealers of petroleum products who have been negotiating with the Joseph Boakai-led government to institute an increment in the retail price of gasoline and diesel, but to no avail.

In March 2024, President Boakai issued an Executive Order to reduce the cost of petroleum products by 20 cents to alleviate the cost of living. However, petroleum dealers claim that the current price imposed by the Ministry of Commerce is having an adverse effect on their business and may hamper their ability to import more products into the country.

A dealer, speaking on condition of anonymity, told FrontPageAfrica that Liberia has not run out of stock, but dealers are being cautious and employing a business strategy to compel the government to consider their demand.

The source stated, “There was a meeting held and there was supposed to be an increment in pump price and a deduction in LPRC storage handling. There was a meeting held on Saturday, and after that meeting, it was agreed that there would be some changes whereby everybody would benefit. All of a sudden, the Minister of Commerce is not here, and the LPRC Managing Director also doesn’t want to sign. So now, nobody wants to sell because everybody believes that there will be an increment.”

The source said both Connex and Aminata have sufficient petroleum products in their storage facilities, and the Liberia Petroleum Refining Company (LPRC) has been holding onto it until the increment is instituted.

FrontPageAfrica could not get comments from Aminata and Connex.

However, the Managing Director of LPRC, Mr. Amos Tweh, told FrontPageAfrica that the government is not in a position to offer any increment in the pump price of petroleum products.

According to Mr. Tweh, there is enough petroleum product available in the country to meet the demand, so any shortage would result from coercion by importers and dealers to arm-twist the government to meet their demands.

Tweh said: “There have been issues with importers on pricing which we have been discussing with them. All I can say is that LPRC has enough product in the country, and beginning tomorrow, vessels will bring sufficient products for Liberian consumers. Any information you’re receiving is either an attempt to create an artificial shortage to force the government to increase the pump price of petroleum products.”

It remains unclear how long the importers will continue hoarding their petroleum products.

During the hearing of the 2024 National Budget at the Legislature, Gbarpolu County Senator Amara Konneh, opined that President Boakai’s Executive Order #128, suspending surcharges on petroleum pricing, provided a windfall for importers while creating a deficit in the National Budget.

Sen. Konneh stated, “Given the sensitivity of the petroleum sector to exogenous situations beyond our control, permanent relief to citizens can only be achieved if the lower prices can also incentivize consumer spending to stimulate economic activity, thereby increasing tax revenue from other sources, partially offsetting the loss in surcharges on petroleum. This waived amount doesn’t benefit the pump price; it rather creates a windfall for the petroleum dealers.

While we expect EO #128 to stimulate economic activity if enforced, the short to medium-term consequences it creates for the budget are serious and require immediate action.”

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