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N650bn Debt: Oil Marketers Cry Out Over Assets Take Over By Banks

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Oil marketers yesterday appealed to the federal government to hasten payment of over N650 billion subsidy arrears being owed them to save their assets from being taken over by banks.
The marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) made the appeal in Lagos.
Members of the association are Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA), and Independent Petroleum Products Importers (IPPIs).

Executive secretary of DAPPMA, Mr Olufemi Adewole, also urged the government to lessen the bureaucracy process involved in the payment process.
Adewole said that the inability of federal government to pay the debt had resulted to massive job losses in the oil and gas industry and had affected the marketers’ business operations.
Adewole said that 60 per cent of marketers had been forced out of business as banks had taken over their depots, and assets due to their inability to pay back monies borrowed.
According to him, many other marketers were struggling to survive due to government’s inability to settle the subsidy arrears.
The development, he said had been threatening investment in the downstream sector.
The DAPPMA scribe said, although the federal government had earmarked money to clear the debts, yet the marketers had not been paid.
“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 the moment they heard that the national assembly has approved payment to marketers.

“Unfortunately, as at today, September 27, 2018, the money is yet to get into our accounts.
Another challenge we have is that many of the marketers 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,” he said.
Adewole, however, said that the government had promised that part of the money would come as promissory note and cash.
According to him, the information gathered was that the government may pay only in promissory note.
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,” he stated.
An independent marketer, who spoke on conditions of anonymity urged government to deregulate the downstream sector.
The source said that the deregulation would curb the huge amount of money spent on subsidy.
The marketer said that the amount owed marketers in the last four years had not been paid, adding that, that had affected the business operations of most marketers.
According to him, “Marketers have run out of cash and their businesses are gradually going moribund as a result of capital been stocked.
“No marketer can import petrol with the present price differential.We cannot buy fuel at N174 per litre at the international market and government is forcing us to sell at N 145 without paying the differentials.

“That was the reason we are urging the government to urgently embark on full deregulation of the sector to create free flow market and allow government to use the money to develop other sector,’’ he said. The marketer said that only the NNPC imports fuel and then uses its discretion to allocate products to marketers, adding that if deregulated, it would also help government to invest the subsidy money into other sectors. Also, the chairman of south-west chapel of the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), Mr Tayo Aboyeji, said that loading activities had been bad at most private depot. Aboyeji attributed the situation to inability of the marketers to import petroleum products.
Aboyeji said that most drivers had been lamenting low patronage from private depots due to non-payment of marketers’ subsidy arrears among other factors.
Aboyeji said the situation had made some depots to convert workers into contract staff.
“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,’’ he said.

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