Nigeria’s Major Oil Marketers have informed government that rising interest on subsidy arrears owed to its members is hampering investment in the downstream sub sector of the oil industry.
They also warned of dire consequences of current regime which allows the Nigerian National Petroleum Corporation, NNPC, to shoulder responsibilities of importing products.
At a press conference in Lagos Monday, chairman Major Oil Marketers Association of Nigeria, MOMAN, Mr.Andrew Gbodume disclosed that outstanding payments to its members stands at N130.7 billion covering a period of four years.
Gbodume said as a result of the debt marketers have not been able to make further investments apart from not embarking on products importation to augment NNPC’s efforts.
He also, noted that the current system which allows the Corporation to hold monopoly of importation is not sustainable and as such stakeholders should be allowed to proffer solutions and come up with a new sustainable model for the country.
The chairman said so far no fresh investment has been made by existing operators because they are cash strapped and some are even battling to pay salaries.
“The banks are no more willing to lend money to downstream operators because they are not sure when they will recover their money. We also cannot embark on any expansion projects because we cannot access funds”, he lamented.
More worrisome is the idea where NNPC will allocate members products with only two weeks repayment window after which interest would be charged.
“We need todiscuss new system of supply, petroleum economics is technical and we need to debate this and agree on a workable supply arrangements and also there is urgent need to regularly review the pricing template.
We believe the path to fully achieving a sustainable environment for the Nigerian petroleum industry begins with the downstream private sector. We feel the time is now to encourage a well informed and honest debate amongst ourselves as Nigerians on our downstream pricing policy, showing sensitivity to the fears of Nigerians and the challenges we face as a people and as an economy, to arrive at an equitable but sustainable business model”, he reasoned.