Leading oil marketers in the country under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) have appealed to the Federal Government to accelerate the payment of over N650 billion subsidy arrears owed them to enable them meet their loan repayment obligations to their banks.
Members of the association comprise, the Independent Petroleum Marketers Association of Nigeria (IPMAN); Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs).
Speaking on the group’s demand, the Executive Secretary of DAPPMA, Mr Olufemi Adewole, also urged the government to lessen the bureaucratic processes involved in the payment process with a view to supporting the growth of the downstream sector.
Specifically, he lamented that government’s delayed payment of the subsidy arrears had resulted to massive job losses in the oil and gas industry as well as impacted negatively on oil marketers’ business operations and return on investments.
He lamented that the delayed payment had led to about 60 percent of marketers to close their businesses as banks had taken over their depots, assets and properties due to their inability to pay back loans borrowed while others were struggling to survive due to the inclement business environment and the huge subsidy arrears.
He lamented: “It has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts.
“They did so the moment they heard that national assembly has approved payment to marketers. Unfortunately, as at today, September 27th 2018, the money is yet to get into our accounts.
“Another challenge we have is that many of the marketers, they have to lay off more than 90 per cent of their staff because of financial challenges. Although, few of them are still operating but not in good number with just about three to four staff”, the DAPMA’s Secretary added.
Commenting on the promise by government to offset part of the arrears with promissory note and cash, the marketer said that if the latest information that government may pay only in promissory note was true, it will create some logistics problems for the oil marketers.
He clarified: “ It means you have to go back and discount this promissory note in the bank. This means we are losing because the money has been delayed and this adds up the interest to be charged on our accounts.
“Although, what was approved to be paid is not the actual amount the government owes us. The interest came about as a result of devaluation of naira from N197 to N285 to a dollar.
In his comments, the Chairman of South-West Chapel of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr Tayo Aboyeji, said that loading activities in most private depots had become a problem due to the inability of marketers to import petroleum products.
According to him, most drivers has been lamenting low patronage from private depots due to non-payment of marketers’ subsidy arrears among other factors, thereby making some depots to convert workers into contract staff.
He said: “Government should find a way to pay the marketers and deregulate the sector to allow more players into the industry.
“When the downstream is fully deregulated, more marketers will engage in importation and it will help tanker drivers in their businesses because of the financial challenges”, Aboyeji added.
The NUPENG leader restated the group and other marketers’ position on the need for government to pay the subsisdy arrears urgently in order to forestall a major crisis in the downstream sub-sector of the oil and gas industry in the months ahead.
