Independent petroleum/crude oil marketers have raised alarm over subsidy claims incurred during the subsidy regime.
The oil marketers say the monies were accrued during the subsidy regime.
The body said their indebtedness to banks is now a whopping $1 billion or over N300 billion naira.
That figure represents more than 5% of the entire national budget for 2017!
They also warned that unless president Buhari paid them, they would withhold their businesses.
Read Also: Buhari reopens massive fuel depot in Enugu
Here is the implication of that: liquidity crisis will worsen, the naira will be further devalued and fuel crisis will hit the nation.
But we have a bigger problem: if the president reaches a kind of deferred payment with them, then the crisis will be deferred.
If he insists on not paying them (as we suppose he will do), then we’re not getting out of recession anytime soon.
Aside from that, we don’t even have the money to pay few individuals that lump sum.
On top of that, China, who agreed to give us a soft loan has reneged their decision.
The oil markets said the $1 billion outstanding debt was money borrowed from banks to fund fuel importation.
The group said the money has also accumulated an interest of about N160 billion.
“The FG, through CBN, has initiated intervention programs for strategic sectors like agriculture, manufacturing, petroleum products importation, and aviation.
“The CBN’s intervention programs are primarily to stimulate growth in Nigeria’s foreign exchange earning capacity.
“This will prevent a collapse of the banking system due to the huge exposure of the banks.
“The CBN has also offered FOREX to IPPIs under a special window at an exchange rate of N305.
“However, the exchange rate of N197 were initially opened for IPPIs and transactions concluded.
“The current CBN offer rate of N305 is an increase of 55% and a significant rate differential.
“This means that for every 15,000 metric tons of petrol imported whose FOREX differential claims have not been paid will now be given FOREX at N305.
“By implication a cargo of 15,000MT at $500 per MT is S$7,500,000 or N1, 477,500,000 at N197 rate or N2, 287,500,000 at N305 rate.
“If these outstanding payments to IPPIs are made at N305 they would suffer a loss of N810, 000,000 per 15,000MT cargo of petrol.
“Government’s delay in paying debts to IPPIs and the difficulty they face in procuring forex at equitable rates will likely see the extinction of many of the IPPIs in 2017.
“This will create petroleum products shortages and attendant insecurity,” the marketers added.
“The exposed situation of the banks is exacerbated by the current trends in the petrol market.
“Recall that fixed pump selling price of petrol was increased from N97 to N145 per liter in May 2016.
“It was based on an exchange rate of N285 resulting in a 45% increase.
“On June 20, 2016, the Naira was devalued from N285 to N305.
“That alone is an increase of 7%. But the fixed pump selling price of petrol has not been increased.
“This means that petrol must be subsidized,” the marketers added.
The summary of the whole gist? Pay us or we will ruin the economy.
Our leaders brought this mess on all of us. ALL OF US!