Nigeria’s oil marketers owe foreign banks $950m

Kunle Kalejaye 13 July 2016, Sweetcrude, Lagos – Nigeria’s downstream petroleum operations is currently threatened by $950 million mature foreign currency obligation debt owed by oil marketers to foreign banks.

Citi Group officeIn finance, matured financial obligation is the loan due to a financial institution while maturity date 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 collected offshore loans from Citi Bank, among others, to import petroleum products at the rate of N195 to a dollar. But, due to the current flexible exchange rate policy introduced by the Central Bank of Nigeria, CBN, oil marketers are now being asked to repay their debts and interest at the rate of N280 to a dollar.
They have been unable to pay up due to this development, and this inability to pay up, it was learnt, has forced foreign banks to suspend short and medium-term credit lines to their Nigerian counterparts
Unless the Federal Government intervened in the payment of the money,SweetcrudeReports gathered that the country might soon be faced with severe fuel shortage as marketers will be force to rely on Nigerian National Petroleum Corporation, NNPC, supply which they claim have always been inadequate.
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 this development at a forum organised by the Petroleum Downstream Group of the Lagos Chamber of Commerce and Industry, LCCI, Chief Executive Officer, Integrated Oil and Gas, Captain Emmanuel Iheanacho, said nobody can stomach collecting an offshore loan at the rate of N197 to dollar and being asked 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 at 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 Exchange) is supplied 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,” Iheanacho said.
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