Many petroleum products marketers are currently facing difficulty in getting loans needed to finance the lifting of diesel and aviation fuel in larger volumes from the Dangote Refinery due to the new 45 per cent Cash Reserve Ratio (CRR) recently introduced by the Central Bank of Nigeria (CBN).

It was gathered that the challenge from the increased CRR has allegedly hampered the ability of commercial banks to lend up to N15 billion to enable marketers purchase petroleum products from Dangote Refinery with cargoes.

This, according to industry sources, was contributing to why products from the local refinery had been slow in saturating filling stations across the country.

The Executive Director of Operations at Masters Energy Oil & Gas Limited, Mr. Felix Eribo, told THISDAY that the company had been getting offers from Dangote Refinery but that the company had not started lifting products from them in vessels due to the lack of adequate funding.

He said the banks are now handicapped to lend huge amount that would enable marketers to buy large volumes of products with vessels from the Lekki Free Trade Zone-based 650, 000 barrels per day refining facility.

The CRR is the minimum amount banks and merchant banks are expected to retain with the CBN from customer deposits and it carries no interest and is not available for use by the banks in their day-to-day operations.

It is one of the ways CBN regulates the country’s money supply, inflation level and liquidity in the country. The higher the rate, the lower the liquidity with the banks.

In early 2020, the apex bank’s Monetary Policy Committee (MPC) had increased CRR by five per cent from 22.5 per cent to 27.5 per cent and in September 2022, it moved it to 32.5 per cent in a move to tame inflationary pressure.

However, the MPC at the first meeting in 2024, increased CRR to 45.00 per cent amid double-digit inflation rate.

But Eribo observed that the increased CRR has diminished banks’ ability to lend huge amount of money that would enable marketers to flood the retail outlets with Dangote products.

”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.

“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”, the Masters Energy director stated.

But in the midst of the funding constraint, he said his company was working around it and would lift products with vessels in no long time.

He disclosed that Dangote Refinery allocated Masters Energy two million litres of diesel three weeks ago.

”So, right now, we are just using trucks to lift products from the refinery. They gave us two million litres last three weeks”, he said.

In terms of quality of product from the refinery, Eribo said it met Nigerian standard.

“What matters is that it meets Nigerian standard. Once it meets Nigerian standard, that’s not an issue again. We call it DPR Standard, once it meets their standard, it’s okay.

“Customers have not complained about the quality. You know when you have alternative, that’s when you have complaint. But I know they will meet up, they will keep improving,”, he added.

MrProlific95:
mPR will review the CRR no doubt

Artscollection:
Cardoso dey use text book dey run cbn, 90% of his policies shows that he doesn't know or rather understand the situation of the country.

Authoreety:
Good one... Marketers are one of our biggest problems in the country.....

their excesses will be curtailed by this policy.

Artscollection:
Cardoso dey use text book dey run cbn, 90% of his policies shows that he doesn't know or rather understand the situation of the country.

Mandate1:
even the textbook sef, na upside down I dey see being imolemented. Otherwise, pray tell me how increasing cost of production and doing business bring in FDI

Islie:

Marketers Lament as 45% Banks’ CRR Hampers Buying Products in Cargoes from Dangote Refinery

•Say with monetary policy tightening many banks unable to extend huge loans

•Masters Energy gets two million litres of diesel from Dangote

•Says quality of product meets Nigerian standard



https://www.thisdaylive.com/index.php/2024/04/23/marketers-lament-as-45-banks-crr-hampers-buying-products-in-cargoes-from-dangote-refinery

Jlow2:
Apc govt will give u Maltina and collect hollandia yourgot , fuel 700, desiel 1300, electricity 225 per unit, dollar fell from 1900 to 1200, yet price of food and commodities going higher, they build roads and cars/lorry will pay average of 3000 naira each, the day Nigerians chose buhari over gej i knew Nigeria will never be redeemable, very unfortunate.

Menclothing1:
So you must borrow to buy product lolz you better quit selling fuel

Or buy little u can afford

Why will you borrow loan to do buying and selling
When not manufacturing

This why goods are expensive loan interest rate is 25 percent

COMPAQ:


I beg. This is a useless article. How much is required to buy diesel that Nigerian banks cannot afford to lend? If I buy 10mln litres at N1000, that's just N10bln!

masseratti:
What a lame excuse..if you jave good collateral the bank will give u loan oga..stop lying most of you lots don't have collaterals to back your loans..what u do mostly is just bank to finance your transactions without collateral if anything goes wrong AMCON to the rescue with depositors money will u walk free .oga those days are over ..if you don't have money foe vessels..buy truck loads .