File Photo

For their inability to service their huge debts, Deposit Money Banks (DMBs) have taken over the assets of some defaulting oil marketers.

And to serve as a deterrent to others, the DMBs have equally suspended further access to loan facilities.

At a joint media briefing held in Lagos Sunday, the duo of the Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association (DAPPMA), appealed to the Federal Government to save its operations from imminent collapse.

They urged the government agencies saddled with the payment to expedite action, to save marketers from closing shop as interest on loans keeps increasing.

The marketers, however, appealed to the Federal Government to, as a matter of utmost national importance, settle the N800 billion subsidy debt owed its members

Executive Secretary of MOMAN, Mr. Clement Isong, said the continued delay in the payment of the subsidy arrears has limited marketers’ access to credit lifeline from banks, saying this has negatively impacted on their working capital leading to their inability to pay their creditors and service providers.

Isong pleaded with government agencies concerned to address the bureaucratic bottlenecks causing the delay in the payment process, adding that the delay has resulted in the degradation of the downstream subsector of the oil and gas industry.

Also speaking, the Executive Secretary of DAPPMA, Olufemi Adewole, said the processes highlighted for payment by the government were inimical to the operations of their businesses.

“The processes they have highlighted are killing our businesses. Immediately the banks read in the media that the National Assembly had approved payment for subsidy arrears, they went to court, got injunction and seized our assets.”

Adewole said that 60 per cent of marketers have been forced out of business as banks have taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel.

He said many marketers were forced out of business, while others are struggling to survive due to the government’s inability to settle the subsidy arrears, saying the development is threatening investment in the downstream subsector.

The DAPPMAN scribe said, although, the Federal Government has earmarked funds to clear the debts, the marketers were yet to be paid.

“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as at today the money was yet to get into our accounts.”

He said the other challenge is that many of the marketers have laid off more than 90 per cent of their staff because of financial constraints.

Adewole however said that the government has promised that part of the money would come as promissory note and cash saying the information gathered was that the government may pay only in promissory note.

‘It means you have to go back and discount this promissory note in the bank. This means we are losing because the money has been delayed and this adds to the interest to be charged on our accounts,’’ he said.

According to him, the major challenge the Nigerian downstream petroleum sector is facing is the non-payment of the long outstanding fuel subsidy to oil marketers.

“We appreciate the efforts of the National Assembly and the Federal Executive Council in approving payment but 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. We hope that the debts will be paid in full to the oil marketers as soon as possible,” he said.

Get more stories like this on Twitter & Facebook

AD: To get thousands of free final year project topics and other project materials sorted by subject to help with your research [click here]