Fresh Fuel crisis looms in Nigeria

Motorists and other users of petroleum products may experience scarcity of the products as oil marketers have issued a seven-day ultimatum to the federal government to settle with cash all outstanding payments arising from unpaid subsidy claims, including forex differentials and interest, which it said amount to about N800 billion.

The marketers, under the aegis of Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and the Independent Petroleum Products Importers (IPPIs), said if the government fails to meet the deadline, they would be forced to disengage their workers and shut down their depots.

Speaking yesterday on behalf of the marketers, the Legal Adviser to the Independent Petroleum Products Importers (IPPIs), Mr. Patrick Etim, said the seven-day ultimatum became necessary as all investments and assets of oil marketers are being taken over by banks, while payment of workers’ salaries has been difficult to make.

According to Etim, marketers have asked some of their workers to stay at home from December 1, 2018 as salaries of workers could not be paid due to huge debts owed by government on subsidy.

Etim said, “The only way to salvage the situation is when government pays the outstanding debts through cash option. Other forms of payment instrument like promissory note would not save the intended mass retrenchment.

“As at the tail end of 2018, several months after the assurances were received from government that it would pay off the outstanding debts, it has not paid.

“The oil marketers have requested that forex differentials and interest components of the government’s indebtedness to marketers calculated up to December 2018 be paid within the next seven days from the date of the letter sent to them.”

Etim said several thousands of jobs are on the line in the oil and gas industry, as oil marketers have begun to cut-down their workforce due to their inability to pay salaries.

“At the inception of the current administration, marketers engaged the government with a view to secure approval for all outstanding subsidy induced debts handed over to the current administration,’’ he said.

He said the Muhammadu Buhari administration paid part of the debts with a substantial portion of the subsidy interest and foreign exchange differentials still pending, in spite of the directive of the then Acting President, Prof. Yemi Osinbajo, to the former Minister of Finance, Mrs. Kemi Adeosun, to intervene.

Also, the Executive Secretary of DAPPMA, Mr. Olufemi Adewole, confirmed that the ultimatum letter had been served on November 28 to the Debt Management Office (DMO); Minister of Finance; Chairman, Senate Committee on Petroleum (Downstream); Department of State Services (DSS) and the Minister of State for Petroleum Resources, for urgent payment of marketers’ outstanding debts.

He said this became necessary to avert the imminent collapse of the industry and also help to stop sack of workers as marketers can no longer afford to pay beyond November 30 with such financial constraint.

He stated that the DMO’s prompt response would stop the wastage of government resources, which he said, continues to increase in the form of interest on unpaid amounts, which is currently in excess of N118 billion.

“We urged 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 Petroleum Equalisation Fund (Management) Board (PEF(M)B) and in a few cases AMCON judgment debts.

“We urge that the FEC’s approved payment instrument, (the promissory note), be substituted with cash and paid through our bankers to stop the waste of public funds through these debts accruing interest,’’ he said.

According to him, the DMO’s brief to marketers renders the proposed financial instrument inadequate to the industry and nullifies the principle of full restitution to the subsidy scheme participants.

“And it 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,” he explained

 

 

Via ThisDay 

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