Adeosun frustrating Osinbajo’s order to offset subsidy arrears to marketers, banks
A showdown coming from banks and independent marketers may be underway if the Minister of Finance, Mrs. Kemi Adeosun continues to delay the payment of over N800bn that accrued to petroleum marketers between 2014 and 2017.
This is coming on the heels of observed delay by the minister considering the time the Acting president had issued the payment directive.
Already, there are stress signs in some banks and several independent oil marketers the accumulated subsidy arrears, interest on loans and the foreign exchange differentials continue to pile up.
Checks by Business Hilights revealed that imports by independent marketers’ in the last few months have dropped to a paltry three per cent and soon drop to zero if the payments are not made as soon as possible.
Since last month, activities at several private depots are nearing ground zero due to zero imports by marketers on grounds of federal government debts.
Currently, the Nigerian National Petroleum Corporation (NNPC) is taking full responsibility of importation of petroleum products into the country following the seeming scrapping of subsidy regime, but interest on loan has continued to accumulate from 2014 to 2017.
Additional findings also revealed drastic reduction in number of workers by marketers following near zero product import activities caused by the debts.
Marketers, including members of the Depot and Petroleum Products Marketers Association (DPPMA), has issued a communiqué signed by their legal adviser, Mr. Patrick Etim, after a meeting in Lagos reminded the government that the two weeks given by the Acting president to pay them will elapse soon.
The marketers said the devaluation of the naira from 195 to 285 and later to over 305 against the United States dollar had put an additional debt burden in excess of N300bn on them, as the Federal Government agencies base their reimbursement calculation on N197 to $1.
The communiqué read in part, “The downstream sub-sector is now saddled with a debt burden of over N400bn, which keeps rising because the banks are still charging interests on it until the total debt is fully liquidated.
“As a result of the unpaid interest and foreign exchange differentials, we are becoming insolvent and financially handicapped to continue operating profitably. Commercial banks, the original and actual owners of these funds, are already hard hit by our inability to return these funds within the contract tenure of 45 days and have, in line with the CBN’s guidelines, classified marketers’ accounts in all the banks in the federation.”
The marketers said properties, including some storage facilities such as tank farms, provided by them as securities for the funds were in the process of being auctioned.
“We have indeed made several spirited efforts to get the government agencies involved to pay up fully, adhering to the principle of full restitution to all participants in the then Premium Motor Spirit import scheme, but the major challenge on the economy has impeded complete success; hence, we are making a direct appeal to the acting President to intervene.”
