Petrol subsidy debt:
FG pays N168billion to rejuvenate the oil sector
*Promissory notes payment to clear in 4 years
By Udeme Clement :
In line with its policies to rejuvenate the downstream petroleum sector, the Federal Government has paid N168 billion subsidy funds to oil marketers in the country.
Financial Business News learnt that the N168 billion payment made was part of outstanding subsidy debts government owed oil marketers overtime.
At present, the payment made by government through promissory notes to Major Oil Marketers, as well as Independent Marketers, becomes necessary to enhance operations in the sector.
However, notwithstanding this payment, the challenges facing Oil Marketers in Nigeria are far from being over.
The reason being that,
the N168 billion debt payment is made through promissory notes, which will not be converted to cash until the next 3 to 4 years.
This implies that some Oil marketers unable to make new investments or expand their operations now due to lack of funds will have to remain in such poor condition, waiting for another four years to come.
In a chat with Financial Business News, the Chairman, Major Oil Marketers Association of Nigeria, MOMAN, Mr Adetunji Oyebanji, said; “Although we appreciate government effort at this trying time, we should remember these are promissory notes having tenure of up to 4years.
“Meaning that if you want to convert to cash you could lose up to 50% of the value.”
He went on; “If on the other hand you decide to hold on for the maturity date in 4years, it would mean it has taken 7 years to collect payment for what was supposed to be 45day transaction”.
The MOMAN Chairman pointed out; “I am not sure how this will encourage investors in the downstream. But we have little choice, as many companies have gone under because of these debts.”