The Federal Government has commenced the payment of outstanding debts estimated at between ₦60 billion and ₦70 billion owed to independent petroleum marketers, a move expected to ease liquidity pressures in the downstream sector and improve fuel distribution across the country.
The development came as global crude oil prices recorded a sharp decline of more than eight per cent on Monday following indications of a de-escalation in tensions between the United States and Iran, easing concerns over possible supply disruptions that had pushed Brent crude above $100 per barrel in recent weeks.
Speaking on the debt repayment, President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Elijah Shettima, said some marketers had begun receiving payment alerts, although the funds released so far had not yet made a significant impact.
He said the leadership of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had engaged stakeholders shortly after assuming office and sought their input on key challenges affecting the sector.
Shettima expressed confidence in the current leadership of the authority, describing its officials as experienced and knowledgeable about the oil and gas industry.
“Our major appeal is for the Authority to clear the outstanding debts owed to independent petroleum marketers. If these debts are settled, it will go a long way in helping them return to full operations,” he said.
He noted that many marketers had been unable to operate at full capacity due to the unpaid debts, adding that the financial burden had weakened their businesses.
According to him, the outstanding liabilities owed to independent marketers are estimated at between ₦60 billion and ₦70 billion.
“We have noticed that payments have started, which is encouraging. However, based on what we have seen so far, the amount released is not sufficient to make a meaningful impact. We have received payment notifications and are waiting to confirm the exact amounts credited,” Shettima added.
The marketers also called on the government to improve access to petroleum products by allowing independent operators to purchase directly from suppliers rather than relying on third-party intermediaries.
They argued that direct access would reduce costs, improve efficiency and create a more competitive and predictable downstream petroleum market.
Meanwhile, international crude oil prices fell sharply after the United States and Iran signalled a temporary reduction in hostilities following nearly two weeks of heightened tensions.
At the time of filing this report, Brent crude was trading at $88.65 per barrel, representing a decline of 8.65 per cent, while United States West Texas Intermediate (WTI) crude fell by 6.95 per cent to $82.36 per barrel.
The decline followed indications from Washington that it would temporarily suspend its bombing campaign against Iran to allow room for diplomatic engagement.
Commercial shipping through the Bab el-Mandeb Strait has also declined significantly over the past three days amid continued security concerns in the Red Sea, according to the latest report by S&P Global Market Intelligence.
The report showed that vessel crossings through the strategic waterway averaged 31 per day over the period, compared with an average of 43 daily crossings during the first half of July. Traffic through the Strait of Hormuz also declined, averaging 17 vessel crossings per day during the same period.
The slowdown followed renewed security threats in the region. The United Kingdom Maritime Trade Operations (UKMTO) reported two separate incidents involving commercial vessels, including a tanker in the Gulf of Oman that encountered military forces and another tanker in the Southern Red Sea that reported a projectile impact near the vessel.
The Houthis also claimed responsibility for drone and missile attacks on Saudi Aramco facilities in Jizan and Yanbu, including the 400,000-barrel-per-day Jizan refinery, increasing concerns over the safety of commercial shipping routes.
S&P Global said some major insurers had suspended war-risk cargo cover for Saudi-linked vessels travelling through the Red Sea, raising concerns that insurance restrictions could further affect regional trade.
Despite the security concerns, Saudi-linked vessels accounted for 24 per cent of Bab el-Mandeb crossings during the three-day period, recovering from 13 per cent immediately after the Houthis announced a blockade of Saudi ports on 20 July.
The report added that shipping companies were adopting different strategies to reduce exposure to the conflict. While some vessels continued using the Red Sea route while avoiding Saudi ports, others diverted around the Cape of Good Hope, resulting in longer voyage times.
Meanwhile, traffic through the Strait of Hormuz remained dominated by Iranian-linked vessels, although overall transit volumes declined compared with the previous week.
S&P Global said the temporary pause in military strikes between the United States and Iran had eased immediate concerns but warned that shipping activity in both the Red Sea and the Strait of Hormuz was likely to remain volatile until a lasting diplomatic agreement was reached.
