Nigeria’s difficulty to import refined petroleum products, particularly, Premium Motor Spirit (PMS) also known as petrol, has worsened as foreign suppliers have blacklisted Nigeria from further businesses until such transactions are dollar-cash backed.
The development is further compounded with the deferment of about 5.4 million litres PMS daily production, as the Nigerian National Petroleum Corporation (NNPC) yesterday, announced the shut down of Port Harcourt and Kaduna refineries.
Meanwhile, it was gathered that the blacklisting of Nigerian oil marketers by the foreign suppliers followed the challenges faced by marketers to access foreign exchange due to stringent rules by the Central Bank of Nigeria (CBN) on foreign exchange transactions.
Marketers disclosed that they owe their foreign suppliers in excess of $1.29 billion, even as the marketers were paid only N413 billion in December 2015 for oil subsidies.
According to one of the marketers, who spoke in confidence, he lamented:
Yes, government paid us subsidy, but there is no dollar to buy anywhere. The Letters of Credit, LCs, that have matured since 2014 to 2015 are worth $1.29 billion. We are supposed to use the subsidy paid to us to buy the equivalent of what is due to our foreign suppliers, but the banks say there is no dollar.
To show you how bad the situation is, one of us has outstanding matured LC of $75 million, but his banks are only able to provide $1.5 million last week. So how many weeks will it take the banks to offset the outstanding sum for him to be able to pay hiss foreign suppliers?
Remember that what government paid to us was the Naira component of dollar transactions and government is still owes us the outstanding payments on the foreign exchange differentials. This is because when we brought in the products, exchange rate was N165 to $1, but by the time we were paid, it had risen to N197 to $1.
This is why the foreign suppliers have blacklisted us until we are able to pay off our outstanding debts and back future transactions with dollar cash. Also, government did not pay within 45 days under the terms of our agreements, so they still owe us the interests on delayed payments.
Consequently, he disclosed that except for a few marketers, mostly the majors, who already have foreign affiliations, all other marketers have abandoned further importation of petrol until government finds a way around access to foreign exchange.