TheCable

The Depot and Petroleum Products Marketers Association (DAPPMA) says 60% of marketers have been forced out of business as a result of unpaid subsidy arrears by the federal government.

Speaking to NAN in Lagos on Sunday, Olufemi Adewole, DAPPMA’s executive secretary, said that the debt had led to huge financial challenges to the downstream operations.

According to him, the downstream sector petroleum was fast becoming unattractive to lending institutions owing to rising debt profiles.

“This is posing a huge financial challenge to oil marketers and threatening business survival,” he said.

“It has had very adverse effects on our operations. I am aware of four depots that have been forcibly taken over by banks because they got injunctions from the courts.

“Some marketers had to lay off more than 90 per cent of their staff because of financial challenges.”

Adewole said the government had promised that part of the money would come as promissory note and cash but the marketers can confirm that pay would only be made through promissory notes.

“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 up the interest to be charged on our accounts,” he said.

“Really, what was approved to be paid is not the actual amount the government owes us.

“The interest came about as a result of the devaluation of the naira from N197 to N285 to a dollar.”

On Wednesday, Ben Akabueze, director general of the Budget Office said the Nigerian National Petroleum Corporation (NNPC), pays N53 on every litre of petrol sold in the country.

Plotting this against the Department of Petroleum Resources’ estimates that 45 million litres of petrol is consumed daily, translates into N2.38 billion recorded as under-recovery on a day-to-day basis.