Liberia Braces for Possible Fuel Shortage as Importers Hold Back Stock Amid Pump Price Disagreement.
Liberia teeters on the brink of yet another petroleum product shortage, this time a manufactured one orchestrated by major importers withholding stock amidst an unresolved disagreement with the government over pump price increments.
Since the week’s start, motorists in Monrovia have faced extensive queues at certain filling stations. Aminata filling station, for instance, limited petrol sales to coupon-holding customers, while PetroTrade and Connex reported being out of stock. This scenario evokes memories of a similar crisis during the early days of the Weah administration, which culminated in a severe shortage impacting citizens and the economy.
The ongoing scarcity stems from pressure exerted by importers and petroleum product dealers negotiating with the Joseph Boakai-led government for a hike in gasoline and diesel retail prices, without success.
In March 2024, President Boakai issued an Executive Order slashing petroleum product costs by 20 cents to ease living expenses. However, petroleum dealers argue that the Ministry of Commerce’s current pricing is detrimental to their business and could hinder further imports.
Some dealers assert that Liberia’s stock hasn’t depleted but rather, they’re employing a strategic business move to compel the government to address their demands.
According to reports, a meeting was held, initially agreeing on a price hike and a reduction in LPRC storage handling fees. However, subsequent hesitations from the Minister of Commerce and the LPRC Managing Director have stalled progress, leading dealers to withhold sales in anticipation of a price hike.
Both Connex and Aminata possess adequate petroleum reserves, which LPRC is holding until the price increment is approved.
However, LPRC’s Managing Director, Mr. Amos Tweh, insists the government cannot afford a price hike due to ample product availability. He attributes any potential shortage to importers and dealers pressuring the government.
Tweh stated, “There have been pricing disputes with importers, but LPRC has sufficient products available, and starting tomorrow, vessels will deliver enough for Liberian consumers. Any reports of shortages are likely attempts to force a price hike.”
The duration of importers’ stock withholding remains uncertain.
During discussions on the 2024 National Budget in the Legislature, Senator Amara Konneh of Gbarpolu County argued that President Boakai’s Executive Order #128, suspending surcharges on petroleum pricing, favored importers while causing a deficit in the budget.
Sen. Konneh emphasized the need for sustainable relief measures and urged action to mitigate the budgetary impacts of the Executive Order.
Sen. Konneh underscored the importance of ensuring that any economic stimulus measures, such as Executive Order #128, not only benefit petroleum dealers but also stimulate broader economic activity. He highlighted the potential for increased consumer spending to drive economic growth and generate additional tax revenue, offsetting the loss from petroleum surcharge waivers.
The debate surrounding the budgetary implications of Executive Order #128 reflects broader concerns about the balance between short-term relief measures and long-term economic stability. While the order may provide immediate relief to consumers grappling with high fuel prices, its impact on government revenue and fiscal sustainability requires careful consideration.
Moreover, the standoff between importers and the government over pump prices underscores the challenges inherent in regulating the petroleum sector. Balancing the interests of consumers, businesses, and the government in setting fuel prices is a delicate task that requires transparent dialogue and effective governance.
In the meantime, ordinary Liberians bear the brunt of the uncertainty, facing long queues at filling stations and the prospect of further price increases. The outcome of negotiations between importers and the government will have far-reaching implications for the country’s economy and the welfare of its citizens.
As the situation unfolds, stakeholders must work together to find equitable solutions that ensure stability in the petroleum market while safeguarding the interests of all parties involved. Only through collaboration and compromise can Liberia avoid the specter of recurrent fuel shortages and achieve sustainable economic growth.
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