One of the major challenges the Nigerian downstream petroleum sector is still facing is the non-payment of the long standing fuel subsidy to oil marketers.
The Major Oil Marketers Association of Nigeria (MOMAN) has appealed to the Federal Government to come to its aid by settling in full, the N130.7 billion subsidy arrears owed its members.
Addressing the media in Lagos yesterday, Chairman of MOMAN, Mr. Andrew Gbodume, said the debt profile was taken a negative toll on the day-to day operations of member companies.
He explained that the National Assembly had in the first week of July this year, approved payment for oil marketers, worrying that, three months after oil marketers were yet to be paid.
The MOMAN boss noted that, though the process of getting final approval from government coffers could be cumbersome, he nevertheless, pleaded with all relevant government agencies to fast track the release of funds.
Gbodume, said the association was doing all it can to ensure that the debt was liquidated before the yuletide, saying past experiences may have informed its decision to take proactive steps aimed at bringing about a lasting solution.
According to him, one of the major challenges the Nigerian downstream petroleum sector is still facing is the non-payment of the long standing fuel subsidy to oil marketers.
While appreciating the efforts of the National Assembly, he said the non-payment creates a significantly negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on its efforts to continually invest in infrastructure and raise industry standards
He stated that the development has led to the suspension of further credit lifeline by Banks who have been owed for over four years.
“These monies are borrowed funds from various financial institutions. The delay in paying them is equally affecting their balance sheet. On our part as an association, the huge debt profile is crippling our operations and business expansion plans. We cannot carry out some staff welfare programmes which include review of salaries in line with inflation rate figures,” he lamented.
He disclosed that the inability of marketers to receive funding support from Banks has forced them to suspend further importation of petroleum products, thus leaving the Nigerian National Petroleum Corporation (NNPC) as the sole importer.
Gbodume, who is also the Managing Director of MRS Oil Nigeria Plc, commended the Pipelines Products and Marketing Company (PPMC), a subsidiary of NNPC for adequately making products available to its members.
He however, said the gesture of PPMC to supply products to oil marketers does not exceed two weeks, upon which payment must be made; else they begin to charge interest on the fund.
“PPMC has demonstrated its resolve in guaranteeing a non-repeat of the scarcity the nation experienced at the end of 2017 and quite frankly has been done well so far. However, with NNPC being the sole importer and supplier of petroleum products in Nigeria at the cost incurred, it should be clear to all Nigerians that this policy direction is not sustainable,” he warned.