Operators in the downstream sector of the Nigerian oil and gas industry have called on the federal government to pay them their outstanding N130.7 billion fuel subsidy being owed them since four years ago, saying the delay in making the payment is adversely affecting effective operation of their business.
The operators who made the call through their union, Major Oil Marketers Association of Nigeria (MOMAN), at a press briefing yesterday in Lagos, wondered why the government is finding it difficult to pay them the money.
Speaking at the event, the Chairman of the association and Managing Director of MRS Oil Nigeria Plc, Mr. Andrew Gbodume, said the non-payment of the subsidy debt to the marketers has left them with limited fund to carry on with their day-to-day business operations and even to make new investments.
According to Gbodume, the National Assembly had approved the payment since July 2018, but the federal government had not followed that up by refunding them the money. He also stated that the non-payment of the subsidy to them had led to a strained relationship with their lenders (banks), saying because of that, the banks are not willing to give them loan anymore.
“One of the challenges the Nigerian downstream petroleum sector is facing is the non-payment of outstanding fuel subsidy to oil marketers.
“We appreciate the efforts of the National Assembly, but the non-payment creates a significant negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on its efforts to continually invest in infrastructure and raise industry standards. We hope that the debts will be paid in full to the oil marketers as soon as possible,” he stated.
However, Gbodube faulted the current business model of the country’s petroleum industry, whereby only the Nigerian National Petroleum Corporation (NNPC) is allowed to import fuel.
According to him, this model is unworkable and unsustainable, and requires a holistic look.
He added: “Petroleum economics is a very technical area, so we need to have a very technical debate on the model. NNPC is the sole importer which is not supposed to be. We believe the path to fully achieving a sustainable operating 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 among ourselves as Nigerians on our downstream pricing policy, showing sensitivity to the fears of Nigerians as well as the challenges we face as a people and as an economy to arrive at an equitable but sustainable business model,” he further said.