N800bn subsidy debts: Oil marketers issue 7-day ultimatum to FG
NEWS DIGEST–Oil marketers, yesterday, issued a 7-day ultimatum to the Federal Government to settle the N800 billion outstanding debts including forex differentials and interest rate component owed them in cash.
The marketers, under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs) in a joint statement, yesterday, said that failure to meet the deadline will force its members to disengage their workers at the depots from fuel loading.
According to Mr Patrick Etim, legal adviser to the Independent Petroleum Products Importers (IPPIs), the 7-day ultimatum became necessary as investments and assets of oil marketers were been taken over by banks, while payment of workers’ salaries remained a serious problem.
According to Etim, marketers have asked their workers to stay at home from December 1 as their salaries could not be paid due to huge debts owed by government on subsidy.
“The only way to salvage the situation is when government pays the outstanding debts though cash option for marketers to pay workers – than other forms of payment instruments like (promissory note) – to save the intended mass retrenchment.
“As at tail end of 2018, several months after the assurances received that government would pay off the outstanding debt, nothing has been done.
“The oil marketers have requested forex differential and interest component of government’s indebtedness to marketer be calculated up to December 2018 to be paid within the next 7-days from the date of the letter sent to them,’’ he said.
Etim said several thousand jobs are on the line in the oil and gas industry, as oil marketers begin a cut-down of their workforce due to inability to pay salaries
“At the inception of the current administration, marketers engaged the government with the view to secure approval for all outstanding subsidy induced debts handed over to the administration,’’ he said.
The counsel said the current administration paid part of the debts with a substantial portion of the subsidy interest and foreign exchange differential still pending, in spite of then acting President Yemi Osinbajo’s intervention and directive to the former Minister of Finance, Mrs Kemi Adeosun.
Similarly, the Executive Secretary, Deport and Petroleum Products Marketers of Nigeria (DAPPMA), Olufemi Adewole, confirmed that oil marketers had given government 7-day ultimatum to pay all outstanding debts owed marketers including forex differentials and interest component.
Adewole also confirmed that the ultimatum had been served on November 28 to the Debt Management Office, Minister of Finance, Chairman, Senate Committee on Petroleum Downstream, Department of States Services and Minister of State, Petroleum Resources for urgent payment of marketers outstanding debts.
He said this became necessary to save the industry from imminent collapse and also help to stave off any sack of workers as marketers can no longer afford to pay beyond November 30th with such financial constraint.
He advised that DMO’s prompt response would stop the wastage of government resources, which continuous to increase in the form of interest on unpaid amounts which as at today is in excess of N118 billion.
“We urge the DMO to process and pay marketers in cash for their outstanding forex differentials and interest component claims, together with the amount already approved by the Federal Executive Council (FEC) and the National Assembly.
“Marketers are not in a position to discount payment on the subsidy induced debt owed as proposed by DMO, the expected payment is made up of bank loans, outstanding admin charges due to Petroleum Products Pricing Regulatory Agency (PPPRA), outstanding bridging fund due the Petroleum Equalisation Fund (Management) Board (PEF(M)B) and in a few cases AMCON judgment debts.
“We urge that the FEC approval payment instrument, the promissory note, be substituted with cash and paid through our bankers to stop the avoidable waste of public funds through these debts accruing interest,’’ he said.
According to him, the DMO brief to marketers renders the proposed financial instrument of inadequate value to the industry, nullifies the principle of full restitution to the subsidy scheme participants, “and does not achieve the purpose of reliving the industry from the unsupportable financial burden arising from its participation in the importation of product under the subsidy scheme of the Federal Government.mended by PPPRA, then it will be accepted by marketers.
“NPA’s back door, arm twisting tactics won’t work with fuel marketers who are presently owed over N800 billion.
“This is largely consisting of forex differentials and interest, marketers will not absorb this additional cost as their margins have been eroded over the years without being reviewed, ‘’ he said.