PETROAN Clarifies Request for ₦100 Billion Is Loan And Not 'Free Money'

The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) clarified on Wednesday that its request for ₦100 billion is not for a grant, but a loan to help its members deal with challenges caused by the removal of fuel subsidies.

PETROAN President Billy Gillis-Harry explained that the money would be used as seed capital to set up an energy bank. This would allow members to access low-interest loans, lower fuel prices, and prevent the closure of up to 10,000 businesses that are struggling with high operational costs.

"We didn't say the government should give us free money," he said, Punch reported. "We said, 'Put it in the energy bank and give it to us as a single-digit interest loan.' With that, fuel prices will come down, and the fund will recycle and grow significantly within a few years."

Gillis-Harry stressed the need for government support through the proposed energy bank. He believes this would help create a more sustainable sector and reduce reliance on high-interest loans from commercial banks.

He pointed out that they are paying interest rates of 36% to 40% on loans, making it difficult to lower fuel prices. He argued that a 9% interest rate from the energy bank would massively improve the industry and benefit Nigerian consumers.

Gillis-Harry recommended that the government focus on investing in key infrastructure like refineries, pipelines, and storage facilities to boost local refining capacity. He urged collaboration with neighboring countries to address smuggling and called for allocating crude oil to local refineries to increase production and reduce reliance on imports.

Reflecting on the sector's progress, Gillis-Harry noted that 2024 saw important developments, including the rehabilitation of the Port Harcourt Refinery and the start of operations at the Dangote Refinery.

He expressed optimism about the sector's future, emphasizing its potential for growth and sustainability despite ongoing challenges. Furthermore, he urged the government to consider privatizing the Warri and Port Harcourt refineries to maximize their potential.

The removal of fuel subsidies by President Tinubu in 2023 caused a sharp increase in petroleum product prices. The cost of transporting a 33,000-liter truck rose from ₦7 million in May 2023 to ₦30 million by October 2024, forcing many marketers to shut down.

As a result, some retailers now share resources to buy a single truckload of petrol to distribute among their stations.

National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN) Hammed Fashola suggested creating a dedicated oil and gas bank, similar to the Bank of Industry. He believed such a bank would better understand the financial needs of petroleum marketers and help the sector grow.