Daily Independent (Lagos)
Adeola Yusuf
12 January 2009
Petroleum products marketers have threatened not to resume importation and supply of petroleum products until payment of the over N140 billion indebted by the Federal Government to them.
The marketers under the aegis of the Major Oil Marketers Association of Nigeria (MOMAN) said at the weekend that they would not get involved in further importation of petroleum products in the face of accumulating bank charges on the loans secured by its members from the various banks to import petroleum products into the country.
The Executive Secretary, MOMAN, Obafemi Olawore who spoke on behalf of the association, called for a speedy payment of the debt "to aid our operations", adding that the banks were now reluctant to grant loans to members.
This delay in the payment of the outstanding debt, according to him, had already resulted in the mounting bank charges subjecting the marketers to difficulties to service back their loans within the 30 to 45 days stipulated by the banks.
Expressing optimism over government's ability and readiness to pay the debt, Olawore stated the government "would fulfil its earlier promise to pay the N140 billion debt this week," stressing that any further delay in the payment would compound the problems of the members of the association.
He suggested the payment of interest on any overdue debts to the members of MOMAN so that they could defray part of the bank charges on the loans.
Olawore identified the current devaluation of the naira as another threat to the importation and other opeartions of all major oil marketers in the country.
The MOMAN scribe said that members of the association have incurred about N5.2 billion (about $484 million) as extra cost on importation of refined petroleum products into the country.
The recent devaluation of the naira by the Central Bank of Nigeria (CBN), according to Olawore has further compounded the problem facing the oil marketing companies, as petroleum products were imported at the old exchange rate of N118 to the dollar.
He stated that the current exchange, which hovers around N135 and N140 to a United States' dollar, would make the marketers incur extra N5.2 billion or $484 million
His words: "If the value of the naira has depreciated and yet we have to pay those who supply the products in foreign currency, then a big problem is being created.
"The suppliers will get payment in dollar and not in naira, the payment would have to be at the current value of the naira to the dollar, which is N127 to one dollar as against when the exchange rate was N118 to one dollar."
He said that the only way out of this problem was for the government to prevail on the CBN to allocate foreign exchange directly to the major oil marketers instead of allowing them to go to the open market to source for forex.
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