Don't Miss

Subsidy debt: Marketers threaten to stop petrol importation

By on July 15, 2013

The Major Oil Marketers Association of Nigeria,  whose members comprise Conoil, Forte, MRS, Mobil, Oando and Total, has threatened to stop importation of petrol due to the non-payment of their N40.6bn subsidy claims by the Federal Government.

The Secretary, MOMAN, Mr. Obafemi Olawore, who spoke with newsmen in Lagos on Friday, said the debt was largely for petrol imports done this year.

Although he said subsidy payments were made in June, only Forte, Mobil and Total got N2bn, N2.2bn and N5.2bn, respectively, making a total of N9.4bn.

While other marketers have been fully paid for their fuel imports in 2011 and 2012, Mobil is still being owed N7.83bn for the period.

According to a document on the status of outstanding subsidy claims made available to our correspondent, the Federal Government still owes Conoil N3.98bn;  Forte, N4.148bn; MRS, N5.35bn; Mobil, N5.62bn; Oando, 19.34bn; and Total, N1.66bn.

The non-payment of the debt, Olawore lamented, had made it difficult for marketers to continue to do business, noting that they relied on bank loans for petrol imports.

He explained that the agreement with the Federal Government was for subsidy payments to be made 45 days after the imported fuel had been delivered.

For failure to abide by the 45-day agreement, the MOMAN scribe said the marketers were losing a lot in bank interests and foreign exchange.

As such, he said the marketers had reduced their fuel import quota from 60 per cent to 45 per cent.

He said the marketers could be forced to stop importation of petrol if the N40.6bn was not paid.

He said, “The Federal Government does not abide by the 45-day agreement for subsidy payment. They didn’t pay between January and June 2013 until we shouted in June. As of June 2013, the total subsidy claims for major marketers amounted to N50bn.

“But we have only been paid N9.4bn for imports done in 2013.  It is noteworthy to know that only three major marketers were paid N9.4bn. The other three with a large chunk of the money have not been paid anything.”

Due to nine months of delayed payment, Olawore said MOMAN members had to pay N13.1bn as interest to banks, adding that another N2.49bn loss was incurred as a result of foreign exchange fluctuation.

He said, “Generally, interest rate is between 20 per cent and 23 per cent for oil marketers because of the volume of business we do with the banks. But because we are always not being paid on time, the bank charge becomes an issue and interest starts counting after 45 days.

“Because of this, marketers have paid N13.1bn as bank interest for a part of 2012 and the last six months in 2013. I was shocked when one marketer showed me a demand note from one of the banks for payment of interest and it was N300m.

“It has become very tough to continue the business. The banks are chasing us, and if you do not return their money, they won’t give you more money to do business. At the same time, they are happy calculating the interest.”

The MOMAN scribe, who insisted that oil marketers, might be forced to embark on drastic employee cuts, said, “The message is that we have reduced importation and we will reduce further. We might be forced to stop importing totally and reduce employees.”