FG owes oil marketers N140bn

Banks shut credit lines
The non-payment of fuel subsidy arrears, amounting to over N140bn, has resulted in the virtual closure of bank credit lines to major and independent oil marketing companies who need such funds to import petrol into the country.
The situation, which has resulted in the Nigerian National Petroleum Corporation, NNPC, remaining the only importer of products, accounts for the persistent fuel scarcity across the nation as the corporation has not been able to bring in enough fuel in addition to grossly inadequate logistics infrastructure to distribute the products imported.
There are fears that the situation could worsen as the Yuletide approaches and global demand for oil.
Investigations showed that the oil companies have suspended participation in the third and fourth quarter import programmes due to uncertainties over payment of subsidy arrears and anticipated delays in payment of subsidy for imports due to stringent new conditions imposed by the Ministry of Finance for such payments following the massive corruption discovered in the administration of the fuel subsidy regime.
The managing director of one of the nation’s largest petrol companies who does not want his name mentioned disclosed to National Mirror at the weekend that they had to suspend imports due to paucity of funds.
“If you have borrowed to import and you are not being paid, we cannot continue to incur more liabilities from the banks, it is as simple as that. The NNPC used to import 50 per cent of products, now it is the only importer and it is obvious that when other major players are out of the system, there will be problems,” he said.
A tank farm owner in Port Harcourt, who is also a major receiver of import, said he had not done any business in the last four months despite being cleared by the Ministry of Finance.
“My bankers have decided that the N900bn provision for fuel subsidy is not enough and they think that if we import fuel now, we won’t’ get paid until next year, yet we hear that government will deregulate eventually. The situation is not very clear,” he said in a telephone interview yesterday.
According to him, the subsidy liability generated so far this year had reached almost N2.7trn and most of this money would likely go to the NNPC, which is now the sole importer. “I don’t see the difference, if they pay the subsidy to us or to the NNPC. If government does not want to pay subsidy, it should deregulate the market and let us compete,” he added.
The Executive Secretary of the Major Marketing Companies of Nigeria, MOMAN, Mr. Obafemi Olawore, who confirmed the development in a telephone interview over the weekend said: “About N140bn is being owed the major and independent marketers. This high level of indebtedness constrained them from raising loans to import products.”
Olawore said the banks are not willing anymore to provide loans because there is no guarantee that marketers who face great difficulties in raising funds would soon be paid.
 The Senior Special Adviser to the Minister of Finance, Mr. Paul Nwabuikwu did not take calls or respond to messages over the weekend. But informed sources said the rigorous process of verifying claims has greatly affected regular payment of subsidy claims.
In fact, it was learnt that since September, this year no claims have been paid to marketers who have made several trips to Abuja to resolve issues with the ministry.
The General Manager in the Group Public Affairs Division of the NNPC, Dr. Omar Farouk, however, said: “We have enough petrol and other products to meet demand.”
He said consumers; especially motorists should desist from panic buying as the present stocks can meet demand for several weeks.
But marketers, whose officials queue for weeks at private jetties where the NNPC imported products are stored face distribution – related challenges in the process of taking the product from the jetties to their retail outlets.
Independent Petroleum Marketers Association of Nigeria, IPMAN, Mr. Mike Osatuyi, said: “We pay higher than required to lift the product from the jetties belong to members of Depot and Petroleum Products Marketers Association of Nigeria, DAPPMA. This constrained us them from selling at the controlled N97 per litre.”
He said: “The regulatory agencies should be blamed for their inability to enforce and sanction operators interested in exploiting the masses.”
The spokesman of NIPCO, Mr. Taofeek Lawal said: “The stocks are declining gradually because marketers depend on NNPC to meet the demand of consumers. If subsidy is paid as when due, they would be empowered to bring in more products.”
He said: “The situation could worsen as we move closer to Christmas and New Year celebrations, characterized by increased movement of commuters from one part of the nation to another.
According to him, “The increased movement would call for more consumption of petrol and other products, particularly as power supply has not yet been stabilised in different parts of the nation.”
The General Manager in the Group Public Affairs Division of the firm, Mr. Omar Farouk said the Corporation has commercial stocks of the products in different parts of the nation.
He said: “Consumers, especially motorists should avoid panic buying as NNPC has sufficient quantity of petrol and other products in different parts of the nation.”
Investigations showed that distribution has greatly been hampered as a result of pipeline vandalism. For instance, the attack of Arepo pipeline has greatly affected the distribution of petrol to many parts of the nation.
A visit to Arepo over the weekend showed that members of the joint task force on vandalism were till guarding the facility, even though its operation remained shut. It was learnt that close policing of the area would culminate in putting appropriate measures in place for NNPC engineers to return for maintenance of the facility.
The NNPC spokesman said: “We cannot move into the area for rehabilitation of the pipeline now. We would do so as soon as security agencies are ready to provide the required security backup for the work.”
Spokesman of the Department of Petroleum Resources, DPR, Mr. Paul Osu did not take calls or responds to messages sent over the weekend.