FUEL SCARCITY IMMINENT AS MARKETERS ISSUE FG 7-DAY ULTIMATUM OVER N800 BILLION DEBT

LAGOS, Nigeria – Major oil marketers today issued a 7-day ultimatum to the Federal Government to pay outstanding debts of over N800 billion, including forex differentials and interest rate components. 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) said that failure to meet the deadline will force its members to disengage their workers, which will cripple loading of petrol at depots nationwide

Mr Patrick Etim, the Legal Adviser to Independent Petroleum Products Importers (IPPIs) who confirmed the development today said that the 7-day ultimatum became necessary as all investments and assets of oil marketers are been taken over by banks, while payment of workers’ salaries remains a serious dilemma.

According to Etim, marketers have asked their workers to stay at home from December 1 as salaries of workers could not be paid due to huge debts owed by the 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 form of payment instrument like (promissory note) would save the intended mass retrenchment.

“As at tail end of 2018, several months after the assurances received by government would pay off the outstanding debt, but as I speak, 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 next 7-days from the date the letter was sent to them,’’ he said.

Etim said that thousands of jobs are on the line in the oil and gas industry, as oil marketers began 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 current administration,’’ he said.

The counsel said that the current administration paid part of the debts with a substantial portion of the subsidy interest and foreign exchange differential still pending, despite appeals to the then acting President Professor Yemi Osinbajo for urgent intervention and directive to the former Minister of Finance, Mrs Kemi Adeosun.

Similarly, Executive Secretary, Deport and Petroleum Products Marketers of Nigeria (DAPPMA), Olufemi Adewole, confirmed that oil marketers had given government 7-day ultimatum notice to pay all outstanding debt owed marketers including forex differentials and interest component.

Adewole also confirmed that the ultimatum letter was served on November 28 to the Debt Management Office, Minister of Finance, Chairman, Senate Committee on Petroleum Downstream, Department of State Services and the Minister of State, Petroleum Resources for urgent payment of marketers outstanding debts.

He said that this became necessary to avert imminent collapse of the downstream sector and also help to stave off any threat to sack 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, since interest continue to increase and is now 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 urged that the FEC approval payment instrument, the promissory note be substituted with cash and paid through our bankers to avoid waste of public funds,’’ he said.

According to him, DMO brief to marketers 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.

The DAPPMA scribed said that some government institutions involved in resolving the lingering problem appreciate the dire situation marketers face and the urgent need to pay off these debts in full without further delay.

However, a depot owner, who spoke on anonymity condemned the Nigerian Ports Authority (NPA) and Nigerian Maritime Administration and Safety Agency (NIMASA) in their quest to implement Stevedoring Regulation 2014, which conflicts with the Petroleum Products Pricing Regulatory Agency (PPPRA) Act of 2006.

The depot owner said that the agencies claimed they would not clear fuel laden vessels except the oil marketer utilise the Stevedoring firm workers.mHe said that marketers had only argued that Stevedoring Regulation 2014 should take cognisance of PPPRA fuel pricing template.

This, he noted was because the stevedoring cost was not reflected in the template and therefore could not be accepted by fuel marketers due to cost implications.

“But if it is reflected on the template, which technically translates into fuel price increase and is approved by the FG, whenever recommended 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.