There are indications that several petroleum marketing companies could be liquidated following the failure of the Federal Government to pay over N500 billion debt incurred as a result of forex differentials incurred on petroleum products imported into the country to ensure adequate supply.
The Chairman, Depot and Petroleum Products Marketers Association (DAPPMA) Prince Dapo Abiodun in an exclusive interview with Nigerian NewsDirect disclosed that the marketers were facing trouble as a result of the failure of the government to pay over N500 billion debt being owed marketers. He noted that some of the marketers were also facing the Economic and Financial Crimes Commission and the Asset Management Corporation of Nigeria (AMCON) due to huge debt that accrued as interest on loans raised from the government’s representatives during series of meetings. “The representatives of the government listened to us at several meetings yet that amount of money remains outstanding and crippling business activities of marketers. . This is a problem that has lingered on for so long,” he disclosed.
Speaking further, he said the Minister of Finance had collated these claims and gone to the Federal Executive Council (FEC) to seek approval for the total amount due to marketers but because this was not in the budget, it had to go to the National Assembly which according to him could not approve it until it went on recess.
He said, “Our prayer was that the payment began before the end of July but that has not been the case, interests continue to be mounting. The situation is getting worse; most marketers have lost the economic power to even pay their staff because this amount of money has accrued over time.
“This time last year when the exchange rate was changed, we had transactions that were done at the rate of N197. The thinking is that once you get naira, you could to CBN at N197 to a dollar. CBN however changed it to N305. So, the same naira you are supposed to get has become double. It is so bad. We know that the FG is doing do much to ensure we are paid but there is just so much bureaucracy involved. We are hopeful that the National Assembly will be gracious enough to come back, if only to address this issue and go back to their recess”.
He however commended the Federal Government in its bid to ensure that issues affecting the association are dealt with to ensure easier supply and distribution.
He said, “You would observe that there has been stability in the supply of petroleum products in the country since the beginning of the year. This is largely due to efforts by the President Buhari-led administration through the Minister of state, Petroleum and the Group Managing Director of NNPC, who have jointly ensured that marketers and the issues affecting them are being dealt with because that’s the only way you can have the supply and distribution that you see today.
“Sometimes last year, we did partial deregulation that took prices from N96 to N145 and since then prices of crude oil have been epileptic and since the relationship between crude pricing and refined products pricing is directly proportional, any increase in crude price will affect prices of refined products. As such, the government has been managing the situation with us.
“The government itself has played the supplier of last resort meaning that when marketers are not able to import because crude has gone up. Despite the fact that the CBN has graciously ensured that they make foreign exchange available to us as much as we need it through what we call the NNPC intervention.
“However, when crude price rallies and gets to a point, even with that forex intervention, we will not be able to import because as crude price goes up and exchange rate remains constant, the landing price of petrol will go up unless we begin to get forex at a rate that begins to follow that differential which of course they cannot possibly do.
What happens is that, government imports and sells to us in Naira to enable us sell at prescribed market rate. So, government has done relatively well and even much better than previous years,” he added.
What is the update on the amount owed marketers by the government? The problem of unpaid foreign exchange differentials continued to accrue interest in banks. The amount of money remains outstanding and is crippling marketers’ business which is also making them have issues with the Economic and Financial Crimes Commission (EFCC) and the Asset Management Corporation of Nigeria (AMCON )
The Minister of Finance had collated these claims and gone to the Federal Executive Council (FEC) to seek approval for the total amount due to marketers but because this was not in the budget, it had to go to the National Assembly which could not approve it until it went on recess.