Fuel Depot Owners Blame Scarcity on Banks, CBN Regulations

Written by on June 4, 2015

 Central of Bank of Nigeria head office

Central of Bank of Nigeria head office

Owners of fuel depots under the aegis of Depot and Petroleum Products Marketers Association (DAPPMA) have blamed the current fuel crisis on banks and the regulations issued by the Central of Bank of Nigeria (CBN), which imposed credit ceilings on fuel importers.

The depot owners and marketers have also reiterated the need for the administration of Muhammadu Buhari to remove fuel subsidy, stressing that the subsidy scheme only benefits foreign refineries where the petroleum products consumed locally in Nigeria are being sourced.

The Executive Secretary of DAPPMA, Mr. Olufemi Adewole, confirmed in a statement yesterday that this is the first time since the introduction of the subsidy scheme that marketers will not have ready and easy access to fuel import loans.

According to him, this is also the first time that commercial banks will notify importers that based on the regulations issued by the CBN, the importers have attained their credit ceilings with their various banks and would have to make some refunds on the existing loans prior to being funded for petrol imports.

“Unfortunately the expected refund to the banks is yet to be reimbursed by the federal government,” he said.

He noted that over one week after the senate committees’ meeting with major petroleum industry successfully persuaded the petroleum tanker drivers and NARTO to call off their strike  and resume loading of fuel, the depot owners and other fuel importers are still being owed billions of naira in unpaid subsidy reimbursement, interest on delayed payment and foreign exchange differentials.

“This much was expressed to DAPPMA and the Major Oil Marketers Association of Nigeria (MOMAN) by the former Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala in her letter to both associations, a copy of which she also released to the senate committees for reference.

“However, the letter did not state the timeline for the re-verification exercise, which the minister instituted on the amount she disputed and also did not state the expected date of payment which ‘PSF’ participants had been clamouring for in all the meetings  held with the former minister since February 2015,” he said.

“Due to debts owed transporters by marketers, who have been experiencing serious financial stress due to outstanding debts owed them by the federal government as a result of petrol imports under the petroleum subsidy scheme, the PTD-NUPENG and NARTO had at various times protested non-payment of their freight charges by withdrawing their services hence it is unfortunate for anyone to insinuate that marketers are blackmailers holding the nation to ransom via a strike about which they know nothing,” he explained.

DAPPMA, however, made a U-turn on its earlier claim that Capital Oil and Gas Industries Limited was not being owed a dime, and clarified that the company is indeed being owed an undisclosed amount by the federal government, but added that this figure was not included in the figures published by Okonjo-Iweala.

Adewole said it would be “gross injustice against participants in the subsidy scheme, who actually render a social service to the nation by importing petrol at international rate and selling below cost price at the behest of the federal government to be accused of being saboteurs just because they asked to be refunded the difference between the landing cost of the imported petrol and the local selling price in line with the agreed conditions of participation.”

According to him, depot owners and marketers, as patriotic Nigerians, had always advocated the need to remove fuel subsidy, which only benefit foreign refineries where the product consumed locally in Nigeria is being sourced.

He called on the Buhari administration to fully deregulate the downstream petroleum sector as the Nigerian economy cannot continue to sustain the subsidy regime.

“Funds released after the removal of subsidy can be utilised for infrastructural development and job creation as addition to jobs already created by DAPPMA members,” he added.

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