The marketers under the aegis of the Independent Petroleum Products Importers (IPPIs) said in a communiqué yesterday that members owe some banks as much as N305 billion ($1 billion) which has increased to N465 billion due to accumulated interest. They cited government's discontinuation of the fuel subsidy regime and failure to pay outstanding arrears before the new pricing regime as reasons for their problems.
Already funding for fuel imports is affected and this could create product scarcity and raise pump prices. The scarcity of kerosene worsened yesterday in Lagos, Calabar, Kano and Kaduna states as a litre of the product sold for N400.
Unresolved issues on funds borrowed for fuel imports could also negatively impact banks' profitability as they will be forced to make more provisions for the debts, undermining their capacity to fund economic activities in line with government's budget implementation and job-creation strategies for 2017.
The chief executive of one of the top five banks yesterday said banks' non-performing loans in the first and second quarters of the year could get worse before a rebound. The bank chief said the economy would then get a boost from monetary and fiscal measures, if only they are implemented as planned.
The Spokesman of the Central Bank of Nigeria, Isaac Okorafor, declined speaking on the matter, but noted that it was becoming a tradition for marketers to put claims on government and the apex bank, even on issues outside institutional control.
The marketers stated that since government could not pay them for imported products between 2014 and 2015 as agreed, the interest accumulated over time, has amounted to N160 billion.
TheGuardian Reports