More reasons have emerged compounding the fear of petroleum products scarcity in the country as it has become clear that petroleum marketers cannot pay or service banks loans in the last two years.
Operating under the aegis of the Independent Petroleum Products Importers (IPPIs), the group said in a communiqué that members owe some banks as much as N305 billion ($1 billion) which has increased to N465 billion due to accumulated interest.
They cited government’s discontinuation of the fuel subsidy regime and failure to pay outstanding arrears before the new pricing regime as reasons for their problems.
This development is affecting funding for fuel imports and could create product scarcity and which will end up causing rise in pump price.
Already, the scarcity of kerosene worsened yesterday in Lagos, Orlu, Kano and Kaduna states as a litre of the product sold for N400.
The communiqué added that unresolved issues on funds borrowed for fuel imports is affecting the banks’ operating costs and could negatively impact banks’ profitability.
Currently, banks are forced to make more provisions for the debts, undermining their capacity to fund economic activities in line with government’s budget implementation and job-creation strategies for 2017.
The marketers in the communiqué added that since government could not pay them for imported products between 2014 and 2015 as agreed, the interest accumulated over time, has amounted to N160 billion.
The communiqué signed by IPPI’s legal adviser, Patrick Etim, stated that some of the marketers, who include members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) and Depot and Petroleum Products Marketers Association (DAPPMA), have begun to stop operations due to the debts.
“Government approved the landing cost which fluctuated as it depended mainly on the international price of petrol and exchange rate of naira/dollar. A key term of the government’s contract is that the subsidy payments shall be paid to IPPIs within 45 days of discharge of petrol cargo,” said the petroleum marketers.
“It was also agreed that after 45 days the government shall pay the interest charges on the loans taken by the IPPIs to finance the importation of cargoes of petrol,” the group said.
