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Failed Banks: Fuel scarcity imminent as credit line worry marketers

By Yemie Adeoye

FOLLOWING the alleged risk exposure of the five major banks in the country and their subsequent take over via a bail out by the Central Bank of Nigeria (CBN), the country appears to be heading for another round of petroleum products scarcity Vanguard can authoritatively reveal.

The banking sector crises which is currently rocking the nation is said to be responsible for the seeming crises which looms in the downstream sector.
Some of the operators who spoke to vanguard on the issue where of the opinion that the CBN was quite hasty in the sacking, arrest and trials of the five former Managing Directors, and as such is on the verge of collapsing the economy which is mainly dependent on the oil sector.
According to them it is strange that this could happen when the government is clearly aware of the fact that the downstream sector which drives the economy is import dependent.

*The Total operated Apko FPSO project with proven reserves well in excess of 620 million barrels was inaugurated at the weekend.
*The Total operated Apko FPSO project with proven reserves well in excess of 620 million barrels was inaugurated at the weekend.

A Managing Director of one of the major marketing companies who spoke with Vanguard on the condition of anonymity noted that the country would be sorry for the actions of the CBN governor if not properly and urgently modified.

He stated further that it is not possible to avoid a fresh rounds of scarcity as most marketers and importers of petrol are now faced with the problem of trust from corresponding banks as letters of credit from Nigerian banks are not being honoured by the corresponding banks.
“They have stopped giving us facilities, and that is very sad for an import dependent economy.  Either the CBN Governor was not well-briefed or there is an agenda being played out as speculated. Why the rush in getting back loans issued by these banks to their customers, especially performing loans which has also been affected by the CBN moves.

“The CBN has arrogated upon itself the monopoly of knowledge on performing and non-performing loans, that is why you see company like ours listed as debtors of non performing loans.  To start with the bank in question holds a substantial equity in this company and besides that it collects all incoming revenues from our station nationwide, so what that means is that if such a company grants us a facility it is automatically programed to be serviced, as this is a marriage where divorce can hardly come in.

I was attending a conference in South Africa when the news broke!  And we saw the pictures of the two famous billionaires in the country appeared in the news with their pictures as being indebted to these troubled banks, i was immediately taken aback as there were potential investors in the country at that gathering and they all started seeing the country as unstable.  I was ashamed of being a Nigerian that day.”

Some of the marketers also queried why different figures were popping up from different sources regarding such a very sensitive issue.  According to them the most effective banking tool which is public trust and confidence is being seriously eroded by the CBN’s action.

They argued that the CBN could have carried out its oversight functions in a more humane manner given the sensitive nature of the issue at stake.
Also speaking on the development a close industry source who also pleaded anonymity stated that the major marketers involvement in the issue is quite minimal, adding that the marketers’ capacity to import had already been impacted by the indebtedness of the Petroleum Products Pricing and Regulatory Agency (PPPRA) put at N70 billion.

According to him the main issue which may bring about a fresh round of scarcity is not the current bank crises but the unpaid debts of the PPPRA.
“I will say that the only thing which may lead to immediate decrease of products importation, distribution and supply is if the PPPRA does not pay us our money. Remember we said they are owing us N70 billion. They have now said its not N70 billion but N46 billion and what we are looking at now is for them to even pay the said N46 billion.  Just give us that one because the difference between our figure and theirs is due mainly to the exchange rate. At the time they gave us the N17 billion that they are talking about in the newspaper they used an exchange rate of N136.00 whereas as at that time we showed them proof that we have got the dollar at N148.00 and N149.00, and our own position is to outline the principle of restitution. We went to the bank, took some money, we imported and we sold at a price lower than what we should have sold because we want to obey the government bidding. So if we did all these, what they should do is to pay us and pay us on time.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.