Acting President Yemi Osinbajo has directed the Minister of Finance, Mrs. Kemi Adeosun to pay oil marketers all outstanding subsidy claims, which the marketers estimated at about $2 billion.
The capacity of the Major Oil Marketers Association of Nigeria (MOMAN) and the Depot and Petroleum Products Marketers Association (DAPPMA) to import petroleum products had been impaired due to the huge unpaid subsidy claims and mature letters of credit (LCs) arising from the old subsidy regime.
As a result, the acting president recently summoned a meeting with oil marketers, in which Adeosun, Kachikwu and the Central Bank Governor, Mr. Godwin Emefiele, were in attendance.
At the end of the meeting, Osinbajo was said to have directed the finance minister to, within two weeks, resolve the problem of the outstanding subsidy claims owed marketers.
The petroleum minister was also said to have confirmed the federal government’s indebtedness to marketers and urged the government to do everything possible to clear the debts so that marketers could commence importation of petrol, as only the Nigerian National Petroleum Corporation (NNPC) currently imports the product.
But in a communiqué issued yesterday at the end of their meeting in Lagos, DAPPMA stated that the claims, which they estimated at N800 billion, were still outstanding and appealed to the acting president to intervene urgently to ensure prompt payment.
The communiqué, which was signed by their legal adviser, Mr. Patrick Etim said the payment of the outstanding debt would enable the marketers resume importation of petrol.
Etim, who confirmed that Osinbajo held a meeting with the marketers on May 22, where he directed the finance minister to pay all verified claims, added that oil marketers actually borrowed over $1.2 billion from the banks for importation, while interest on the loans and foreign exchange differentials had accumulated over time.
“Some of our members have resorted to staff retrenchment due to inactivity, the marketers said. Besides, our worst fear is that AMCON (Asset Management Corporation of Nigeria) at some point may take over our firms as a result of the debts.
“It is for these reasons and other challenges facing the downstream petroleum sub-sector that we seek government’s intervention to approve immediate payment of the debt,” Etim said.
According to the marketers, foreign exchange differentials, which arose as a result of the initial devaluation of the naira by the last administration and the interest payable due to delayed reimbursement by the government, have not been fully settled by the appropriate federal government agencies, despite the government’s approval to pay the marketers.
“The recent further devaluation of the naira from N195 to N285 and later to over N305 to $1, while the federal government agencies based their reimbursement calculation on N197 to $1, has left members our association with additional debts in excess of N300 billion.
“The downstream sub-sector is now saddled with a debt burden of over N400 billion, which keeps rising because the banks are still charging interests on it until the total debt is fully liquidated.
“The outstanding matured letters of credit are currently over $1.2billion. Because many Nigerian banks were involved in raising the funds, the entire Nigerian banking system is at risk on account of these transactions,” Etim added. – Thisday.
