Chief Executive Officer of Integrated Oil and Gas; Captain Emmanuel Iheanacho has appealed to the Federal Government for the payment of huge outstanding subsidy funds being owed marketers for imported petroleum products which ran into billions of Naira.
Speaking on his 2017 expectations, Iheanacho equally urged the government to urgently resuscitate the country’s refineries to improve and increase local refining capacity for petroleum products availability for local domestication.
Findings by Shipping Position Daily correspondent showed that the government was as at end of December 2016 owing marketers $1.7 billion debt which had accrued since May 2015.
A breakdown of the debts showed that major oil marketers are owed about $500 million, while independents, depot and petroleum products marketers are owed about $1.2 billion.
Speaking with newsmen recently, Iheanacho said that marketers are rattled with the huge amount being paid as interests to banks whenever there was any delay in the payment of the subsidy.
“For instance, a marketer is being owed over N5 billion and pays about N3 million to service loan on daily basis. This attracts an additional interest from the banks on the importers. We borrowed money from banks on specific terms, on conditions which must be met.
“The painful aspect is that the Federal Government does not consider such accrued interest when paying the subsidy after several months of delay,’’ he said.
According to him, “in going forward, we need to put more efforts in locally refined petroleum products which called for policy action to resuscitate existing refineries and create enabling environment for Nigerian private sector entrepreneurs to be able to invest in the refining capacity.
“In 2016 expenditure, nearly 70 per cent of forex required for running the economy went into the importation of the products. If we need to turn our economy around from consuming economy to producing economy, we have to deal with exporting of crude oil by creating the opportunity that local entrepreneurs can build private refineries.
“So, that Nigeria can become a net exporter rather than being a net importer/consumer of petroleum products.”
On pipeline vandalism ravaging the logistics arm of oil sector, he said that in spite of government’s efforts to eliminate the challenges of pipeline sabotage that was affecting crude oil transportation to the refineries on routine basis, crude oil theft and pipeline vandalism still persist unabated.
Iheanacho said that the singular economic sabotage amounted to monumental loss of funds that could have been deployed into critical areas of national development.
The oil magnate said that the menace continued to build up; weaning confidence in industry’s operators; and players and potential investors.
“Pipeline sabotage has continually strained Nigeria to resort to petroleum products’ importation and wastage of the limited resources meant for capital and human development programmes,’’ he said.
Iheanacho advised that the only way out of the challenge of pipeline vandalism is to ensure sound pipeline integrity that could guarantee safe transportation of the products all over the country.
He said that pipeline installation could now be done using state of the art technology in a manner that would be inaccessible to vandals.
Iheanacho suggested the use of co-ordinate security network to eliminate pipeline vandalism, review enabling legal instruments for sanctioning violators and evolve more effective counter-strategy against oil theft and sabotage.
The subsidy owed petroleum marketers was the balance from the payments made by the Goodluck Jonathan administration, before handing over to President Muhammadu Buhari, while the rest was incurred in May 2016, when the Federal Government devalued the Naira.
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