(Ecofin Agency) - Nigerian fuel marketers have threatened to halt the supply and distribution of oil products across the country if the Federal Government does not pay the $2.2billion subsidy debt owed to them for imports.

In a joint statement on Thursday, the marketers explained that majority of the debts were bank charges on loans acquired to order for gasoline cargoes between 2014 and Q1 of 2017.

“As a result of the unpaid interest and foreign exchange differentials, we are becoming insolvent and financially handicapped to continue operating profitably. The outstanding matured Letters of Credit are currently over $1.2 billion. Because many Nigerian banks were involved in raising this fund, the entire Nigerian banking system is at risk on account of these transactions,” the marketers said.

Africa’s second largest oil producer frequently import around 1 million metric tonnes of gasoline per month with 40% of those imports coming from major marketers. Gasoline is often bought on the wholesale market in dollars and is then sold into the retail market at a fixed price of $0.45 per litre.

Before now, the Federal Government used to pays subsidy on gasoline imports so as to keep domestic pump prices low. However, the regime was stopped this year by the Buhari-administration, which is struggling with a sharp drop in oil revenues caused by the slump in global prices as well a decline in the country's oil production.

Anita Fatunji