NNPC to explore alternative funding to offset subsidy debts to oil marketers

By BusinessNews Staff on October 14, 2015

The Nigerian National Petroleum Corporation (NNPC) monday said it would explore new financing mechanisms to offset outstanding debts on subsidy claims which the federal government owes petroleum marketers in the country.
The corporation also stated that it would reach out to relevant creditors such as the banks in the country to ease off extant repayment pressure on marketers and extend the credit lines offered by them.
Reports indicate that the government’s subsidy debts to oil marketers runs into billions of naira.
The corporation in a statement from its Group General Manager Public Affairs, Ohi Alegbe, in Abuja, explained that these are parts of the extant measures it is taking to ensure that supply of petroleum products in the country is sustained even into the forthcoming yuletide.
The statement noted that these decisions were reached at a meeting between the Group Managing Director of NNPC, Dr. Ibe Kachikwu, and members of the Major Oil Marketers Association of Nigeria (MOMAN) as well as the Depot and Petroleum Products Association, (DAPPMA).
According to the statement, the meeting was at the instance of the corporation.
It stated that at the end of the meeting, the
NNPC and the key downstream operators were able to reach a consensus to work together to eliminate all obstacles that could hamper the free flow of petroleum products across the country.
Kachikwu, it quoted, stated that the issue of uninterrupted supply and distribution of petroleum products across the country remains very important to the present administration of President Muhammadu Buhari.
He added that the government was willing to do everything possible to ensure that members of the public do not go through any form of hardship in accessing petroleum products particularly.

On the protracted subsidy debts to oil marketers, Kachikwu reportedly promised to work with other relevant government agencies to fast track the payment of the outstanding debts.
He equally promised to, in the interim, arrange a meeting with the relevant creditors (bankers) to ease off pressure on marketers and extend the credit lines.
The NNPC boss noted that several financing mechanism were being explored to offset the commitment to oil marketers, hinting at the possibility of exploring a monthly payment option.
“In future, we may explore some creative means to prevent backlogs,” he said.
Also, the Secretary General of MOMAN, Femi Olawore, was quoted in the statement to have commended Kachikwu for his support and thus pledged the readiness of the marketers to work assiduously with the government against fuel scarcity across the country in the forthcoming yuletide and even beyond.
Olawore also called on Kachikwu to facilitate the institution of a special committee to verify and authenticate the current national fuel consumption figure of 40 million litres per day.
Similarly, the Chairman of DAPPMA, Chief Dapo Abiodun, was quoted to commend the NNPC for what he termed improved services at various product loading facilities of the Pipeline and Products Marketing Company (PPMC).
He thus urged the new management of the company to sustain the tempo.
Also, the NNPC has debunked reports in some social media of a purported reduction in current pump price of petrol from N87 per litre to N57, describing the report as false.
It therefore advised members of the public to ignore such tales, noting that the price of petrol remains N87 per litre.