No Bank loan, No Fuel in Nigeria –  No income? You can STILL get a credit card: ‘Irresponsible’ banks fuel, No Bank Account? No Problem: How to Live Bank-Free, Business loans – Get Finance to Fuel your Business, No bank loan? No problem!, Loose Regulations Fuel the Rise of Loan Sharks,13 reasons fuel crisis persists in Nigeria,  How to divest from fossil fuels, no matter the size of your piggy bank, Does collateral fuel moral hazard in banking – E-thesis, Get Loan Without Credit Check Info. 

Even though this is a news item,Complete Full Marks Consultants Limited (CFMC Ltd) being a financial consultant and annalist has interest in it. CFMC Ltd sees the move to deny business men loan facilities as crippling to business.

Therefore, I want to highlight the benefits of loan to business and then relate it to the current move to deny loan facilities to importers of petroleum product in Nigeria. 


In fact, many businesses  like the Nigeria’s petroleum product importers, use bank loans as a suitable part of their financial structure. With the bank loan they enjoy the following advantages:
  • The business is guaranteed the money for a certain period 
  • Loans can be matched to the lifetime of the equipment or other assets the loan is for
  • The loan does not  provide the bank with a share in the business
  • Interest rates may be fixed for the term, making it easier to forecast interest payments
This means that, your business will continue to run for a long time. But what happens if the loan is withdrawn? The business may no longer be guaranteed. It is like sniffing life out of your business.

CFMC Ltd Advice on Debt Management:

However, If you have obtained loans for your business and unfortunately the loan is now classified as non-performing, meaning it is up to 90 days and above since last payment, CFMC Ltd would like you to consider any of the following measures to address this challenge.
Reschedule Your Debt: when you borrow and fail to repay the loan instalments according to the terms and conditions agreed upon, you can request for a reschedule of the debt. This means you reschedule the repayment terms only and the loan continues to run.

Restructure Your Loan: Restructuring is a process of adjusting the conditions of the existing loan. In most cases it is replacement of the old loan contract. So, I can say restructuring is a completely a new loan as it requires all the documents to be modified


Debt Swap Measures: A debt swap is a transaction in which the obligations or debts of a company or individual are exchanged for something of value.

Pay your debt: Find resources to pay your debts. Work hard and earn much and plan how to pay your debts.
Remember that Debtors can always embarrass you at any time. If you read the next sub-topic, the gist on the fuel importers ordeal with the banks in Nigeria, you will appreciate the professional advises CFMC Ltd has given here.


BANK LOAN FOR FUEL:  A very authoritative source to us has revealed that Banks will no longer extend lending facilities to importers and marketers of petroleum product in Nigeria. This is because the downstream sector loan from the banks which are over $2.2 billion are not or poorly serviced which in turn is affecting liquidity in the banking system.


It is feared that this measure will affect petroleum product supplies which could cause products scarcity. Major Oil Marketers of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), and Depot and Petroleum Products Marketers Association (DAPPMA), have started complaining over this recent attitude of the banks. The banks itself is insisting that the operations of the financial institutions and the country’s financial system are under threat due to the loans.

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It is reliably gathered that the banks have started to go after marketers as parts of strategies to recoup the non-performing loans. The marketers had earlier on confirmed that the $1 billion outstanding debt was borrowed to fund importation during the subsidy regime. They also confirmed that its outstanding loan has accumulated an interest of N160 billion. 

Independent Petroleum Products Importers (IPPIs) said, this is because the Federal Government failed to pay the interest on the loans as agreed. The source disclosed that about Seventy per cent of the non-performing loans were incurred from oil and gas-related ventures, making the banks loose interest in the sector at the moment. Oil and gas sector has remained one of the biggest debtors of commercial banks. 

The source also stated that by the beginning of 2017, the banks have not liquidated the Letters of Credit from 2014 because of lack of foreign exchange from the government. The outstanding matured Letters of Credit are currently over $1 billion. “The exposed situation of the banks is exacerbated by the current trends in the petrol market. When the fixed pump selling price of petrol was increased from N97 to N145 per litre in May 2016, it was based on an exchange rate of N285 resulting in a 45 per cent increase.

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On June 20, 2016 the naira was devalued from N285 to N305, which is an increase of seven per cent but the fixed pump-selling price of petrol has not been increased. This means that petrol must be subsidised,” the marketers added.
“A key term of the government’s contract with IPPIs is that the subsidy payments shall be paid to IPPIs within 45 days of discharge of petrol cargo.
It was also agreed that after 45 days, the government shall pay the interest charges on the loans taken by the IPPIs to finance the importation of cargoes of petrol.
The outstanding interest payments owed to IPPIs is currently over N160 billion,” said the marketers. The communiqué added that the outstanding claims arose largely from importation of petroleum cargoes authorised by the administration of Dr. Goodluck Jonathan’s government, stressing that since government is a continuum, the contracts of the Jonathan’s government will remain binding on successive governments.

Consequently, the marketers appealed to the government not to allow its inactions in handling the critical issues facing banks, airlines, manufacturers, electricity companies and other businesses expose consumers to suffering, adding that honouring contract agreements would help boost local and foreign investments.


Fuel scarcity in Nigeria today – Reasons

Fuel scarcity in Nigeria has recently become a big problem. Rising cost of living makes people go through hardships. And the fuel crisis makes everything even worse.  Energy crisis frightens people, as their life  become even more difficult. It is hard to believe that the state, which has been considered one of the top oil-producing, faces such troubles.   Then people ask: What causes energy crisis and when would it get better?

To understand the situation better, we need to know about the key causes of the these  related topics on causes of current fuel scarcity in Nigeria:

  • fuel scarcity in Nigeria 2017
  • history of fuel scarcity in Nigeria
  • solution to fuel scarcity in Nigeria

READ ALSO: Nigeria’s Presidential Enabling Business Environment Council (PEBEC) 

  1. The number one reason is that every  fuel seller wants to get more profit.
  2.  This fact makes them to buy fuel at lower cost , at government approved price , but go on to sell it at a higher price more than the ceiling price by the government, and because the people need fuel, they are ready to pay such great amounts.
  3.  Distribution problems. For the marketers it is often hard to bring the fuel to every part of Nigeria. Besides, the government has favoured areas.   
  4. Refineries are not used. The non-working of the local refineries means that the product will be imported. This means foreign exchange will be needed, bank assistance may be require one way or the other.
  5.  The marketers don’t get enough assistance from the banks, which forced them to limit the importation of petroleum products.


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