Again, fuel crisis looms as oil marketers plan to close shop ~ Zeniths Blog

Again, fuel crisis looms as oil marketers plan to close shop

– Oil marketers in Nigeria are planning to close shop following huge debt the marketers owe commercial banks in the country

– The oil marketers are owing over $1bn, hence they are finding it difficult to cope with the system, a development which may lead closing shop

– The marketers say government should pay them the debt it owe the association as it is a fallout of the subsidy regime embarked upon during Jonathan’s government

Fuel crisis may soon hit the Nigerian market as oil marketers under the aegis of Independent Petroleum Products Importers (IPPI) are beginning to close shop following indebtedness to Nigerian banks to the tune of $1bn.

Filling station in Nigeria

According to Punch, the oil marketers include Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria and Depot and Petroleum Products Marketers Association.

In a communique signed by the associations’ legal adviser, Mr Patrick Etim, besides the debt owed the banks, the oil marketers are having an accumulated interest of N160bn.

This development, the marketers said, has stalled their importation of fuel as the money they owe the banks form part of what they are in turn owed by the government of Nigeria.

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In a communique made available after a meeting in Lagos, Mr Etim said the government’s debt rose from the petroleum subsidy scheme which the federal government entered with the oil marketers to import and supply fuel to the market on the condition that the government would pay the difference between the landing cost of and pump price as fixed by the government.

The claims of the oil marketers arose from the importation of petroleum cargoes authorized by former President Goodluck Jonathan’s government under the subsidy scheme.

Punch quoted the association as saying: “It is said that government is a continuum, therefore, the contracts of the former Jonathan’s

government with the oil marketers will remain binding on successive governments.

“There is a need for President Muhammadu Buhari’s government to keep improving governance, especially by correcting the wrongs of previous governments, and making the government responsible to its contracts and responsibilities.

Ibe Kachikwu, minister of state for petroleum

“Government, through the Central Bank of Nigeria, has initiated intervention programmes for strategic sectors such as agriculture, manufacturing, petroleum products’ importation and aviation.

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“The CBN’s intervention programmes are primarily to stimulate growth in Nigeria’s foreign exchange earning capacity, and to prevent collapse of the banking system due to the huge exposure of the banks.

“The CBN has also offered foreign exchange to the oil importers under a special window aimed at liquidating outstanding matured Letters of Credit at an exchange rate of N305/$1.

“However, the exchange rate of N197/$1 when the letters of credit were initially opened for the importers’ members and transactions concluded and the current CBN offer rate of N305/$1 is an increase of 55 per cent and a significant rate differential.”