Petrol: FG refuses to pay outstanding debt, say marketers

The current petrol scarcity across the country may have been aggravated by the alleged refusal of the Federal Government to accede to the demand of the oil marketers for the issuance of Sovereign Debt Notes for their outstanding subsidy claims, our correspondent has learnt.

A sovereign debt note, which serves as a security against any delay in payment of subsidy for imported cargoes, can be discounted for cash. With it, the marketers that do not get their payments within the stipulated 45 days can take the instruments to their creditor banks as cash to pay for their loans.

The Federal Government had said in March that Sovereign Debt Notes of N100bn were issued by the Debt Management Office to settle part of the subsidy arrears owed the marketers.

The government and the marketers had last week Monday met to resolve the problem and to ascertain the balance of the subsidy debt due to the marketers.

At the end of the four-hour meeting, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, had said the issues that led to the scarcity had been resolved without disclosing the outstanding subsidy debt.

But the scarcity of the product has yet to abate as queues of desperate motorists continue to grow in some of the filling stations selling the product, with most of them dispensing petrol at between N140 and N200 per litre instead of the regulated price of N87.

It was gathered that most of the independent and major marketers had run out of stock and were not making any plans to import the product as a result of the delayed subsidy reimbursement.

The Executive Secretary, Depot and Petroleum Products Marketers Association, Mr. Olufemi Adewole, said in a telephone interview with one of our correspondents on Monday that no payment had been made to members of the body after the last payment of N154bn, which he said some of the marketers had not even received.

Adewole said, “But the key issue is; we had a meeting with the Minister of Finance last week and at the meeting, we tried to convince her that if they gave us post-dated SDNs in February, which matured in April, she should also give us post-dated SDNs for what is on the ground.

“But she refused bluntly. Unfortunately, our banks have told us that we have exhausted our credit lines. What some of us have received now and what some of us are still expecting is simply to block the big hole of credit that we have with the banks.”

He added that the banks had asked the marketers to sort out the outstanding subsidy debt with the government before they would give new credit lines.

Adewole noted, “So, we have a dilemma now that we don’t even have the product to sell. We are appealing to the government to pay us our money and at the same time pleading with the banks for understanding. But the banks are saying they have reached the ceiling of the credit line to the oil industry.

“If the product is here, we will supply. If the money is paid to us, we will return it to the banks; and then, they can roll it over and we can bring in cargoes. All the transactions we do are through banks, both local and foreign.”

According to him, if the payment of the outstanding subsidy debt is made today, it will take at least 17 days for the product to get into the country as it takes at least two weeks for cargoes from North-West Europe to get to Nigeria.

“The major marketers have products. You know the NNPC keeps saying that they have some volumes of product. So, the NNPC gives it to them and they distribute. But the major marketers themselves don’t have cargoes that are brought in under the petroleum subsidy scheme,” he added.

On the disagreement over the actual subsidy balance, Adewole said, “Marketers submit their papers to the PPPRA. The PPPRA vets all these papers, does all the calculations and arrives at the conclusion that this is what a marketer is entitled to. All these documents are then forwarded to the Debt Management Office.

“So, if there is any disagreement, we are not the ones calculating. It should be between the PPPRA and whoever is disagreeing with those figures.”

When contacted for comment, the Group General Manager, Group Public Affairs Division, Nigerian National Petroleum Corporation, Mr. Ohi Alegbe, reiterated that the corporation had sufficient petrol to service the country, but that the marketers could only lift the product from their depots after making payment.

“If payment is not made, nobody can lift. It is a business. If you go to the depots to lift, you must pay,” he said.

Meanwhile, some marketers have warned that the nationwide scarcity of petrol may mar the May 29 handover of the reins of government to the President-elect, Muhammadu Buhari, of the All Progressives Congress.

Three marketers, who spoke to one of our correspondents in separate interviews, said the insensitivity of the current government to the current petrol supply situation became evident during last week’s meeting they had with Okonjo-Iweala in Abuja.

They said the meeting, which ended in a deadlock, had not changed anything as the government was not prepared to consider the N200.2bn unpaid subsidy arrears claimed by the marketers

According to the sources, the meeting was not able to resolve the controversy surrounding the outstanding actual subsidy arrears being owed the marketers and when it would be paid.

While the minister gave the outstanding indebtedness of the government to the marketers as N131bn, the marketers insisted that they were still being owed N200.2bn even after N154.2bn was paid to them at the end of April.

One of the marketers said, “The Minister of Finance told us that there won’t be any other payment for petrol subsidy from now till May 29. No right-thinking marketer will go ahead to import product on account of the government’s position and the subsidy arrears still being owed the marketers.”

Another marketer said the current scarcity of petrol had refused to go because his colleagues were no longer importing the product.

According to him, if government insists on not paying additional subsidy claims, the marketers will no longer import the product.

“In fact, most Nigerians will be at filling stations struggling to buy petrol when the President-elect will be making his address on that day. I say this because no marketer is willing to stake a kobo on product importation when the coast appears not to be clear at all.”

The Chairman, Nigeria Union of Petroleum and Natural Gas Workers, Lagos Zone, Alhaji Tokunbo Korodo, told one of our correspondents on the telephone on Monday that the cause of the current scarcity was the fear being nursed by the marketers about what would happen after the handover to Buhari.

He said, “The incoming government has made it clear that there won’t be any room for corruption. Against the backdrop of May 29, there is a serious fear of the unknown. Marketers are eager to collect their money.

“They want to collect the money owed them and not to think about importing more products. This is clearly the reason why we are having the nationwide scarcity of petrol.”