The capacity of the Major Oil Marketers Association of Nigeria (MOMAN) and the Depot and Petroleum Products Marketers Association (DAPPMA) to import petroleum products has continued to weaken as unpaid subsidy claims and matured Letters of Credit (LCs) arising from the old subsidy regime hit $2 billion, ThisDay reports.
It was gathered that the huge debts, which grew as a result of rising cost of forex and the interest charges by banks that funded the importation of the cargoes, have since forced foreign banks such as the Citi Bank of New York, BNP Paribas and others, which provided the LCs for the importation, to stop opening lines of credits for the fuel marketers.
As a result, the full participation of the marketers in importation could not be sustained following the rising cost of forex and the accumulation of unpaid subsidy claims, which put pressure on their finances. According to the marketers, no reconciliation of unpaid subsidy claims has taken place between the marketers and the federal government since the beginning of 2017.
The Chairman of DAPPMA, Mr. Dapo Abiodun, said in addition to paying the marketers’ outstanding $2 billion claims, the permanent solution was to remove the cap on the pump price of petrol and fully liberalise the downstream sector.