THERE are strong indications that the nation may be plunged into another fuel crisis due to the refusal of the Federal Government to pay oil marketers over N200 billion debt.
Oil marketers have cried out that the inability to pay their outstanding loans to their respective creditor banks has made it impossible to raise fresh fund to finance the third quarter importation of refined petroleum.
The Finance Minister and Coordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, had suspended payment of subsidy claims until the newly-constituted Reconciliation Committee on Subsidy management, headed by Aigboje Aig-Imokhuede, submits its reconciled reports on the indicted fuel marketers.
When the Technical Committee on Management of Subsidy Regime submitted its report last week, the Federal Government inaugurated another committee to reconcile the reports submitted by the technical committee and House of Representatives’ committee that probed fuel subsidy management.
The reconciliation may, however, take some weeks before the reports are released. But the marketers were claiming they could not wait that long to be paid, as prolonged waiting would result in additional interests being charged by the banks that provided the loan facilities to them.
The chairman of Depot and Petroleum Products Marketers Association (DAPPMA), Chief Sylverius Okoli, categorically warned of imminent fuel scarcity if the Federal Government failed not to act fast on payment of subsidy claims to marketers.
According to Okoli, marketers did not have the money to finance importation of petrol for the third quarter (Q3 2012) allocation due to lack of funds and inability to secure loans from banks as a result of the N200 billion outstanding debt by the Federal Government.
Okoli said that the delay in the payments had accrued lots of interest from the banks they borrowed the money from, adding that the neglect had caused marketers great pains.
The DAPPMA leader said that inability to repay had led to significant interest rate and exchange rate differential exposure, which had to be claimed by the participating companies and reimbursed by the Federal Government.
He said that all concerned oil marketers had served a notice of their intention to shun importation of products in the third quarter.
“The country imports the bulk of its petrol needs through a subsidy regime. The current business environment in the sector makes it necessary for us to bring to attention of government, factors that inhibit our ability to import petrol in Q3 2012.
“Due to the fact that issuance of Sovereign Debt Notes covering balance 2011 and current 2012 PMS import transactions were initially severely delayed and now currently suspended, we have huge outstanding, verified and unpaid subsidy claims in excess of N200 billion from the Federal Government.
“Non-reimbursement of the subsidy claims impairs the ability of any company to meet its obligations to the banks for loans advanced for the purpose of importing PMS under the scheme for the Nigerian public,’’ Okoli stated.
The chairman, Integrated Oil and Gas Ltd., Captain Emmanuel Iheanacho, wondered why the Federal Government did not issue any official statement to be fully responsible for all interests accrued to the debt while holding on to the money.
“There are ways these things work. When the finance minister declined to pay outstanding debt due to ongoing probe, she could have issued an official letter assuring our creditor banks that the Federal Government will pay all the accruing interests. But her silence on that gets me worried.
“As I speak with you, we are owed about N10.5 billion in due PSF refunds, accrued interests payments, exchange rate losses, most of which payments actually belong to our sponsoring bankers. This accumulated indebtedness should have been settled not later than 45 days from the date of the occurrence of the commitment but unfortunately, a sizable proportion of this debt continues to subsist for well over 161 days into the transaction start time,” he said.
The point he was making was that participating marketers under the PSF scheme did not pay refund, neither was the remittance of payments automatic after submission of import documents to the PPPRA, as all PSF payments were still subject to application to and approval by the PPPRA, which made the recommendation through the CBN for the settlement of the marketer’s claims.
An agreement was reached by all marketers, including the Major Marketers Association of Nigeria (MOMAN), DAPPMA and the two factions of IPMAN.
This was contained in a letter forwarded to the Executive Secretary, PPPRA, Reginald Stanley and signed by Chief Sylverius Okoli, chairman, DAPPMA; Mr Obafemi Olawore, executive secretary, MOMAN; Mr Mike Osatuyi, national secretary, IPMAN and Mr Venkataraman Ventatapathy, Managing Director, Nigerian Independent Petroleum Company (NIPCO), representing another faction of IPMAN.
The exchange rate was charged at current rate and it currently varied from banks to banks and based on individual agreement with their respective banks.
Daily consumption of Petrol Motor Spirit (PMS), according to the Nigerian National Petroleum Corporation (NNPC) statistics stood at 35 million litres per day.
The North, from inception, had never enjoyed the regulated price of PMS, because of its distance to sources of supply, as it was currently reported that PMS was sold above N97 per litre from fuel pumps and could be easily purchased on roadsides inside gallons.
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