The Federal Ministry of Finance and petroleum products marketers are now engaged in war of words over accrued interest on bank loans on account of delayed payments of subsidy by the ministry.
Although both parties have taken newspaper advertorials to state their cases, the market may soon be plunged into another round of fuel shortages if the impasse is not resolved soon.
Reacting to the Ministry’s advertorial to the effect that government will no longer pay interest charges as part of subsidy claims in some national dailies last week, oil marketers insist that crisis loomed if the terms were not renegotiated.
The Ministry paid N44.1 billion to marketers, which it made public in the advertorial, while dissociating itself from future payments of banks’ interest charges as being part of the claims.
Already, the fuel marketers by their own calculations are being owed about N190.56 billion as unpaid subsidy from November 2013 till date.
Speaking further with journalists on the issue in Lagos yesterday, the Executive Secretary, Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore, noted that government is obligated to pay both the principal and the interest if it defaults on the 45 days reimbursement agreement reached with oil marketers.
Of the about N190.56 billion owed marketers, he noted that MOMAN, whose members include Conoil, Forte Oil, Mobil, MRS, Oando, and Total oil marketing companies, are being owed about N94.16 billion.
According to him, the N44.1 billion paid by the Finance Ministry is only a part payment for November 2013, adding that payment was only made after “CBN wrote a memo to all banks to confirm marketers’ claims by issuing debit notes for the value being claimed.”
Defending government’s obligation to pay both principal and interest, Olawore said: “In any financial arrangement, there is a penalty. If you default, you pay the price.
“The 45 days reimbursement tenure for claims is not an imposition by marketers. It was an agreement reached by all stakeholders including the Ministry of Finance, their auditors, MOMAN, IPMAN (Independent Petroleum Marketers Association of Nigeria), DAPPMA (Depot and Petroleum Products Marketers Association), banks, PPPRA (Petroleum Products Price Regulatory Agency), NNPC (Nigerian National Petroleum Corporation) and others.”
As a result, Olawore maintained that any change in status quo must be renegotiated and agreed by all stakeholders and not by unilateral decision.
To underscore the huge debt overhang being incurred by marketers, he disclosed that Sterling Bank issued one of its members a debit note of N300 million as interest accruable from the facility extended to it after the 45 days tenure.
He said: “So it is a very rigorous process and no marketer is benefiting from the interest charges; only the banks are smiling home while marketers are being almost stifled out of business, because the interest charges also affects our liquidity status.” [Vanguard]