Nigeria’s Oil Subsidy Debt Hits $2Bn

 In Investor News

The Federal Government is owing Oil marketers over $2 Billion in subsidy claims, Major Oil Marketers Association of Nigeria (MOMAN) said yesterday, 2nd of August, 2018. It’s out-going Executive Secretary, Obafemi Olawore, lamented that the development has forced many marketers to shut operations with attendant loss of jobs by youths hitherto employed by the marketers.

He urged the Government to settle their claims before the Assets Management Company of Nigeria (AMCON) takes over their remaining businesses. Olawore said total deregulation of the downstream sector remained the only lasting solution to the myriad of issues besetting the sector. He said total deregulation of the sector would open up the industry to investors.

Speaking at the send forth dinner held on his behalf by MOMAN, Olawore said the difficulties in recovering their money from the government was why many oil marketers have left the country, citing Forte Oil’s recent notice to divest from some of its investments, following Mobil, Chevron, and Texaco’s sale of their holdings.

“Subsidy is not free money as some erroneously believed as those who came in to profit have left, leaving the space for real players who believe in what they are doing and despite reconciliation and various meetings called to know when the debt will be paid, nothing is forthcoming from the Government’s side,” he said.

He said against the backdrop of reservation on deregulation in the country by a segment of the citizens, deregulation was indeed in practice in Nigeria between January to July 1999, as the Nigerian National Petroleum Corporation (NNPC) did not import any litre of petrol and then it was discovered to be successful with the citizens’ need met by the Oil marketers.

Olawore, with over 20 years’ experience at MOMAN, said the goal of the association is to have a free market oil industry with all the qualities inherent that will allow free entry and exit without government interference but provision of only regulatory framework.

“Deregulation of the oil industry with strong regulators will allow for participation of real investors in the sector. Right from the time of Gen Ibrahim Babangida (rtd), we have been clamouring for deregulation and it is sad that Ghana that came here to study how the Petroleum Product Pricing Agency (PPPRA) works has gone back to their country, set up their own agency for product pricing and have deregulated.

“MOMAN’s goal will be achieved when we have a free market as no one will be owed. Everything will work optimally with forex issue not arising as this has left so many oil marketers almost bankrupt though the situation is okay now,” Olawore said. Olawore said MOMAN believes in dialogue which was the reason for the success seen in the Apapa gridlock clearance done in conjunction with stakeholders such as National Association of Road Trucks Owners (NARTO), Petroleum Tankers Drivers Union (PTDU), Navy, FRSC and NUPENG.

 

https://www.financialwatchngr.com/2018/08/03/nigerias-oil-subsidy-debt-hits-2b/

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