In the wake of the Central Bank of Nigeria’s recent implementation of a 45% Cash Reserve Ratio (CRR), petroleum products marketers are facing significant hurdles in securing the necessary loans to procure increased quantities of diesel and aviation fuel from the Dangote Refinery. This development has cast a shadow over the ability of commercial banks to extend loans, affecting the procurement capacity of marketers.
Marketers, including notable figures like Mr. Felix Eribo, the Executive Director of Operations at Masters Energy Oil & Gas Limited, have voiced concerns over the financing challenges hindering their operations. Despite receiving offers from Dangote Refinery, they have been unable to commence transportation of products via vessels due to insufficient funding.
Eribo explained, “We have continued to get the offer but we have not started lifting with vessels, we are just buying with trucks. I was just discussing with them. The problem most of the marketers are having is this bank issue where CBN is making it difficult for banks to extend lending to buy full cargo.”
The imposition of the 45% CRR has exacerbated the situation, making it increasingly difficult for banks to provide loans of up to N15 billion for the purchase of petroleum products from Dangote Refinery and associated cargoes by marketers. Eribo highlighted the strain on banks, stating, “It’s because of this CRR that they introduced – the 45 per cent CRR. It’s seriously giving banks problem. So, they now have this singular obligor problem. Some of those banks are finding it difficult to cough out N14 billion to N15 billion to give to marketers.”
With the financing bottleneck tightening its grip, the petroleum industry is bracing for potential disruptions in the supply chain, underscoring the urgent need for intervention to address the funding woes faced by marketers.