Depot and Petroleum Products Marketers Association (DAPPMA) on Sunday said the unpaid subsidy arrears of over N650 billion by the Federal Government posed huge financial challenges to the downstream operations.
Executive secretary, DAPPMA, Mr Olufemi Adewole, told the News Agency of Nigeria (NAN) in Lagos that the settlement of the debts owed them would save their assets from being taken over by banks.
Adewole said the downstream segment of Nigeria’s petroleum industry was fast becoming unattractive to lending institutions owing to rising debt profiles of its players on account of unpaid subsidy arrears by government.
“This is posing a huge financial challenge to oil marketers and threatening business survival,” he said.
He said that 60 per cent of marketers had been forced out of business as banks had taken over their assets (depots and other investments) due to their inability to pay back funds borrowed.
According to him, aside marketers that have been forced out of business, others are struggling to survive due to the 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 made an arrangement to clear the debts, payment had not been received by marketers.
He said: “It has had very adverse effects on our operations. I am aware of four depots that have been forcibly taken over by banks because they got injunctions from the courts.
“They did so the moment they heard that the National Assembly had approved payment to marketers. Unfortunately, as at today, the money has yet to get into our accounts.
“Some marketers had to lay off more than 90 per cent of their staff because of financial challenges.’’
Adewole, however, said government had promised that part of the money would come as promissory note and cash.
According to him, the information gathered is that 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.
“Really, 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 the naira from N197 to N285 to a dollar,” he explained.
It would be recalled that the Chairman of the Major Oil Marketers Association of Nigeria (MOMAN), Mr Andrew Gbodume, had on Oct. 18, said that over N130. 7 billion was owed to the association as unpaid subsidy arrears.
DFID , CBM Partner To Assist People Living With Disability
The Department For International Development (DFID), in partnership with International Christian development organisation, (CBM) has assured it’s readiness to provide...
South Korea Fires Shots At Russian Aircraft
South Korea says its jets fired warning shots at a Russian surveillance plane that entered its airspace. Officials said the...
Iran Nuclear Deal Signatories To Meet In Vienna
Representatives from the nations that are still parties to the Iran nuclear deal will meet on Sunday in Austria’s capital,...
Russian LGBT Activist Killed
A prominent LGBT rights campaigner has been found dead with multiple stab wounds and signs of strangulation in the Russian...
Boris Johnson Emerges UK Prime Minister
Boris Johnson has been elected new Conservative leader in a ballot of party members and will become the next UK...
US Expands Towers To Deport Migrants Without Court Processes
The US government is introducing a new fast-track deportation process that will bypass immigration courts. Under the new rules, migrants...
Osinbajo, Tinubu, Sanwo-Olu, Osoba Extol Jakande’s Legacy At 90
Vice President Yemi Osinbajo, National leader of the All Progressives Congress, (APC), Asiwaju Bola Tinubu, Lagos State Governor Babajide Sanwo-Olu...
POLITICS19 hours ago
Between Akpabio’s Loss And Shocking Revelations At Tribunal
OPINION18 hours ago
Mr President, Nigerian Workers Deserve More Than Living Wage
NEWS11 hours ago
Full List Of Ministerial Nominees And Their States Forwarded To Senate By PMB
COVER STORIES21 hours ago
Police – El-zakzaky Followers’ Clash: Deputy Police Commissioner, Journalist, 5 Others Killed
OPINION18 hours ago
Kogi And Politics Of Fake News
NEWS19 hours ago
‘Aisha Buhari Right On NSIP’
COVER STORIES21 hours ago
FG Signs Electricity Deal With Siemens
NEWS8 hours ago
Rowdy Session As Reps Kicks Against Release of Elzakzaky