04 July 2016, Sweetcrude, Lagos — Downstream sector operation of Nigeria’s petroleum industry is threatened by $950 million mature foreign currency obligation debt own by oil marketers to foreign banks.
In finance, Matured Financial Obligation is the loan obligation due to a financial institution while maturity date or refers to the final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.
Oil marketers had earlier collected offshore loan from citi bank among others to import petroleum products at the rate of N195 to a dollar. Due to current Flexible Exchange Rate policy introduced by the Central Bank of Nigeria, CBN marketers are been asked to pay their debt at the rate of N280 to a dollar and all remaining interest.
This development has forced foreign banks to suspend short and medium-term credit lines to their Nigerian counterparts due to the inability of marketers to pay the matured foreign currency obligations of over $950 million.
Unless the Federal Government intervened in the payment of the money, Sweetcrude Reports learnt that the country might soon be face with severe Premium Motor Spirit, PMS also known as fuel shortage as marketers will be force to rely on Nigerian National Petroleum Corporation, NNPC supply which they claim have always been inadequate.
Meanwhile the CBN Governor, Godwin Emefiele, had earlier assured that Nigeria will continue to meet matured financial obligations to foreign investors and her international trading partners.
Speaking on the current challenges facing the downstream sector at a forum organised by the Lagos Chamber of Commerce (LCCI), Petroleum Downstream Group, the Chairman and Chief Executive Officer, Integrated Oil and Gas, Captain Emmanuel Iheanacho said nobody can stomach collecting a an offshore loan at the rate of N197 to dollar and been ask to pay back at the rate of N280 to a dollar with cumulative interest.
“It is a huge loss and nobody can stomach it. I think at this point in time, the CBN governor is fully aware of the problem and I rather suspect that he is doing something about it. It is not a question of whether to meet marketers half way because there was an agreement that the product was sold N197 and you cannot say now that because there is change in the exchange rate you will now exchange the one dollar at N280.
“What one is saying is that if there was an agreement that FX, (Foreign Exchnage) is supply at a certain rate that is the rate that should prevail. I think the CBN governor knows about it and at this point in time he is doing something about it,” Captain Emmanuel Iheanacho said.