By Adewale Sanyaolu
An acute shortage of foreign currencies across the country may have forced some overseas supplier of Premium Motor Spirit (PMS) popularly called petrol to suspend further supply of the commodity to Nigeria, over a $985 million debt overhang, Daily Sun findings has revealed.
Their decision to cut supplies to its Nigerian customers may not be unconnected with the inability of importers to source foreign exchange to offset some of their debt liabilities running into millions of Dollars. Dealers who spoke to Daily Sun, warned however that unless this is resolved, Nigeria may witness another round of fuel shortages.
Confirming the suspension of fuel imports, Executive Secretary, Depot and Petroleum Products Marketers Association (DAPPMA), Mr. Olufemi Adewole, told Daily Sun, that the $985 million debt profile was for supplies made when the exchange rate was N197/$1, which could not be settled due to forex scarcity.
According to him, the transactions using the N197 exchange rate were carried out between December 2014 and December 2015, but payment for over N448 billion was not cleared by the Federal Government until early 2016, when exchange rates rose above the N197 threshold.
He regretted local banks have since debited their accounts using rates of between N300 to N350/$1 for transactions done at N197/$1.
“Beyond our accounts being debited, local banks have since seized to fund our procurement requests as a result of our members huge debt profile,” he said. He also pointed out that banks now cross check to ascertain the level of a marketer’s debt, and when confirmed to be on the high side, credit lines are suspended
‘‘Most of our members have been debited to the tune of whatever their exposure is and right now, we cannot even access facilities from our banks to fund procurement because all the banks are refusing them. That is the challenge we have at hand now.
Now, the question is, who bears the difference between N197 and today’s current exchange rate.’’?
For now, he said most DAPPMA members depend on imports made by the Nigerian National Petroleum Corporation (NNPC) as their business activities have been grounded due to liquidity constraints.
Manager, Corporate Affairs, NIPCO Plc, Mr. Abiodun Lawal, echoed the position of Adewole, as he lamented that imports are at their lowest ebb.
Lawal said the situation was more challenging for independent importers, who have to rely solely on parallel market exchange rates to source forex because they lack support of the government.
He disclosed that the impact has not been felt much by members of the public because the demand for petrol has gone down drastically as a result of the biting economic situation in the country.
‘‘To give you an insight into the difficult operating environment for downstream players, depots that were loading 100 trucks before now, can barely do 40 trucks in a day. For those that have retail outlets, they can afford deliver same at their retail outlets and make some margins. But for those that don’t have any, it is a pathetic situation,’’ he lamented.
Nigeria, Indonesia trade drops to $1.75bn
By Chinwendu Obienyi
The volume of trade between Nigeria and Indonesia has taken a sharp decline to $1.75 billion in 2015 from $4 billion in 2014.
Disclosing this at an exclusive interaction with News Agency in Abuja, the Indonesian Ambassador to Nigeria, Mr. Harry Purwanto, said the decline was as a result of slow trade interactions between the countries.
“The signing of economic and technical agreement in 2001 has been of benefit to both countries. However, after 2014, because of the difficulties in the global economy, both countries have focused on their domestic affairs and it looks like the interaction between our countries is slightly slowing down. This is rather discouraging because in 2014, our trade with Nigeria was almost $4 billion,” he stated. Perhaps this is a result of the transition in Nigeria, the change in government, and in Indonesia we did have our new government in 2014, had a transition and we also have had two cabinet reshuffles. The new administrations will have to learn and see what is on the files before they leap forward,” he added.
Purwanto, however, called for more collaboration that would promote stronger business ties between both countries as it would encourage more of the Nigerian business community to see opportunities in Indonesia and explore more business involving both sides equally.
“On our part, we are trying to encourage more interaction between the business communities of the two countries and we want to see a strong organisation or forum of Nigerians who can be vehicles and motivators to encourage more of the Nigerian business community to see opportunities in Indonesia and explore more business bilaterally,” the Indosia envoy said.