N660bn debt, forex scarcity hamper fuel importation

The Depot and Petroleum Products Marketers Association (DAPPMA) has blamed the inability of its members to import more petrol on the over N660billion debt owed marketers by the Federal Government for petrol imported in the past.

In a chat in Lagos on Wednesday, the group’s Executive Secretary, Mr. Olufemi Adewole, opened up to Business Times when asked to know the reason for the ongoing long queue of trucks along Ijora-Apapa awaiting to load product at Dockyard and Apapa depot.

Adewole said that most marketers had stopped importing product due to inability to access foreign exchange and government refusal to pay the outstanding debt owed.

He said that marketers currently owe some Nigerian banks over 1 billion dollars, which they took as loans to import fuel, and because the government could not pay them or pay the banks interest on the loans as agreed, the interest accumulated over time.
According to him, the main debt is over N500billion while interest on loans is over N160billion.

“The inability to pay or service the loans has not only stalled their further importation of fuel but is threatening the operation of the affected banks and the nation’s financial industry at large

“Foreign exchange remain another big challenge, we don’t have forex to import the product, except were able to get adequate forex.
“For now, landing cost on petrol stood over N145 due to high forex rate which posed a serious concern to marketers on the price to sell the product,’’ he said.

DAPPMA then appealed to the government to provide adequate forex and pay all outstanding debt for a marketer to commence, adding that no investor will import without having value for their investment.

According to him, the lingering queue at the Apapa depot was due to marketers’ inability to import petrol, as the cost of landing charges is above N145, adding that it makes it difficult for marketers to import.

According to Adewole, most marketers depend on NNPC imported petrol cargoes. “we buy from NNPC. So our selling price depends on the price given to us”, he said.

“The huge debt owed marketer is more than our operating fund; we are appealing to the government to urgently pay the outstanding debt which has long overdue.

“Our banks are threatening to debit our account at the current rate at which forex is been sold at N 360 per dollar as against N 197 per dollar that government allocated importation to marketers.

“This means that we are the ones subsidizing the imports.

“If the government failed to address this lingering challenges on price differential, it’s not only marketers that will go down the banks will also collapse because our exposure with banks is in excess of 1.95 billion dollars,’’ Adewole said.

According to him, the high landing cost makes few marketers sell above the Ex-depot price of N133.28.

He urged the government to provide adequate forex for marketers to import product and still sell at the official rate of N145.

Monitoring the Apapa depot, Business Times noticed that some depot owners sell petrol above the Ex-depot price of N133.28.

It was gathered that MRS Oil sells at 135.50k, Hayden, N137.50k, Fatgbems, N136.50k, Folawiyo, N 137, and Capital Oil, N137.
Others D. Jones N136.50, Aiteo, N137.50 and Nipco, Nq133.28.