Foreign exchange scarcity and legacy debts are unsettling the downstream sector with the possibility of fuel scarcity recurring in no distant time, BusinessDay investigations show.
Specifically, the legacy debts of oil marketers are occasioned by the new exchange rate of between N282-284/$ from the previous N199/$ which have ballooned to about N266 billion.
This is against the N190 billion that they were supposed to pay at the old rate of N199/$.
The implication is that delay in paying the debt, along with the foreign exchange liberalisation policy, have brought the difference of N76 billion.
A reliable source from the oil marketers told BusinessDay that government’s insistence that they use the current exchange rate to settle the legacy debts will mean that the marketers will have to look for the differential which is about N76 billion in order to liquidate the debt.
“These businesses were transacted almost two years ago and now, they want us to use the exchange rate of N282 to a dollar to clear these matured obligations that were transacted at the rate of N200. Government is asking us to bring the differentials to make up the difference. That will kill the downstream sector in Nigeria and meanwhile, the interest is piling up at the offshore banks”, the source said.
It is understood the 80 percent of that debt is from two international banks; BNP Paribas and Citibank.
Oil marketers said the NNPC is under-cutting the market because of the price it is selling the product. It sells at N 111 for a product that is costing about N126-127 per litre. They said if they import and sell at about the price the NNPC is selling, they would run out of the markets.
Another reason the marketers gave for not importing is that the process of getting the forex is so slow and they are not getting the needed volume of forex that could have allowed them to import. They said government should change the template for petrol so that they can sell under the regime of appropriate market forces.
Members of the Depot and Petroleum Products Marketers Association (DAPPMA) who spoke to BusinessDay, also said despite the recent foreign exchange policy, they are not disposed to importing fuel because they would not be able to sell even at the current price of N145 Per litre.
The resultant effect is that Nigerians would in no distant future would return to filling stations queuing for the commodity.
Already, fuel supply from the Nigerian National Petroleum Corporation (NNPC) to marketers, has become unsteady, as some marketers get intermitent supply and days of dryness.
The NNPC supplies the bulk of the fuel and some stake- holders are saying it cannot carry the burden for too long. The corporation is alleged not to be importing enough as evidenced in its inability to supply it depots in Mosimi , Ilorin and Ore.
Other stakeholders informed BusinessDay that the NNPC stocks are not stable and it is beginning to make the market apprehensive, as many of the filling stations outside Lagos and Abuja operate one day on and about three days off, an indication that all fuel scarcity has started creeping back gradually because it has stopped supplying products to its depots across the country.
According Nojeem Korodo, chairman Lagos Zonal Council of the Nigeria Labour Congress and Chairman of the National Union of Petroleum and Natural Gas association (NUPENG) who explained why the supplies have been unstable in the larger part of the country.
Korodo said the NNPC has stopped supplying products to it depots in the hinter land adding that everyone is the dark as to what is happening to the depot.
He said all the supplies are diverted to private depots in Lagos and because of this, many other stakeholders that would have ordinarily been encouraged to import, are not doing so because the NNPC supplies their depots and has abandoned its own.
Attempts to get Garba Deen Muhammad, the group corporate affairs manager of the NNPC to comment on the matter have been unsuccessful as he neither responds to calls nor replies to text messages.
Olusola Bello & Frank Uzuegbunum
