N660bn debt weighing Petroleum marketers import strength down—DAPPMA
The leadership of Depot and Petroleum Products Marketers Association (DAPPMA) has called on the federal government for early settlement of subsidy arrears of currently standing at over N660bn.
He said the repayment challenges have been frustrating their purchasing power to place more order for petroleum products.
Executive Secretary of the group, Mr. Olufemi Adewole, said that the arrears had impeded importation of petroleum products and that has been the reason behind momentary scarcity of products.
Explaining more on the causes of scarcity, Adewole noted that the drop in the importation of products by marketers is responsible for the long queues and idle trucks in the Apapa depot.
According to him, “The main debt is over N500bn, while interest on the loans from various banks has risen to over N160bn in the last two years.
“The inability to pay or service the loans has not only impeded importation of fuel, but it is threatening the relationship between the affected banks and the marketers.
“The high foreign exchange rate is another big challenge; accessing Forex to import products has become herculean task.
“Besides, landing cost for petrol has risen to over N145 per litre from N133.28 kobo and marketers are worried as to what price to sell the product.”
Adewole therefore called for adequate foreign exchange and pay all outstanding debts to marketers to prevent distortion in the supply chain, decrying that “Our banks are threatening to debit our accounts at the current rate of N360 to a dollar as against N197 to dollar that the government allocated foreign exchange to marketers.
Continuing, DAPPMA said “This means that we are the ones subsidising the imports,” stressing that “If government failed to address the lingering challenges on price differential, it’s not only marketers that will go down, the banks will also collapse because our exposure with the banks is in excess of 1.95 billion dollars.”