Fuel crisis looms nationwide as FG, oil marketers fail to reach agreement

FEARS of a likely nationwide fuel shortage became rife on Saturday owing to the failure of the Federal government and oil marketers to reach an agreement on N800 billion subsidy arrears.

The oil marketers had been engaging the government over the debt purportedly owed them on fuel subsidy and issued a 7-day ultimatum which expires tomorrow.

But in a statement issued in Lagos, on Saturday, Mr Olufemi Adewole, Executive Secretary, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), said the Federal Government failed to reach any agreement with the oil marketers. This, he said, was in spite of the 7-day ultimatum issued by the organisation to shut down activities in the downstream sector.

However, in what appeared to be a denial, the  Chief Operating Officer (COO), Nigerian National Petroleum Corporation (NNPC), Mr. Isiaka Abdulrazaq, told Sunday Tribune on Saturday that the government had an agreement with oil marketers which remained valid.

He assured that the corporation had 2.6 billion litres of premium motor spirit (PMS), otherwise called petrol, which could last for 52 days based on 50 million litres per day consumption.

But, Adewole said there was no agreement DAPPMAN signed with the government, insisting that the oil marketers would carry out its threat to shut down operations to the letter.

On Saturday, the Federal Government said it would pay the oil marketers N236 billion out of N348 billion approved by the National Assembly as outstanding subsidy claims on Friday, December 14, 2018.

The Chief Operating officer, NNPC Downstream, Mr Henry Ikem-Obih, disclosed this to newsmen in Abuja on Saturday.

“The Debt Management Office (DMO) will by next week, precisely on Dec. 14th, pay oil marketers first part of the subsidy arrears of N236 billion as agreed by both parties.

“We agreed that after the first tranche is paid, the marketers will form committee to work on details of how the next tranche will be paid in 2019 and the last paid in 2020.

“Government is fully committed to pay the first tranche as promised and will be paid through promissory note that will be issued by the DMO,’’ he said.

Ikem-Obih said that oil marketers equally owed government some debt which would not be deducted from the first tranche of payment.

He said that it was unfortunate that DAPPMAN had issued a counter statement from what was agreed at the meeting held with all stakeholders on Thursday.

But speaking with Sunday Tribune on why DAPPMAN is insisting on shutting most depots in Nigeria, Mr Adewole stated that “70 per cent of the debt is owed DAPPMAN members. Other marketers’ stake in the debt is minimal. We are aggrieved and did not sign the agreement because we don’t want promissory note.”

When asked why they don’t want promissory note, he explained that “promissory note will be discounted. We won’t get the face value. They settle NNPC Retail with NLNG dividend, why can’t they pay us cash? We want cash and not promissory notes. Most of my members can’t pay workers’ salaries again. They should treat us with respect,” Adewole said.

Though he did not deny that government indeed owed the marketers, Abdulrazak, explained that the most of the debt was inherited.

“When this administration assumed office in 2015, it inherited fuel subsidy debt. After long process of verification and audit, the figure, that was agreed by all stakeholders, including marketers, Central Bank of Nigeria (CBN), Ministry of Finance and Debt Management Office (DMO), has been approved by Federal Executive Council (FEC). It has also been approved by the national assembly. Where we are is how and when the debt will be paid.”

When asked about claims by Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) that no agreement was reached, he stated that Independent Marketers Association of Nigeria (IPMAN) and Major Oil Marketers Association of Nigeria (MOMAN) were in attendance and signed the agreement.

“MOMAN and IPMAN are critical stakeholders in the downstream sector and I can assure you that the NNPC has 2.6 billion in strategic reserve that will last for 52 days based on 50 million litres per day consumption.”

DAPPMAN in the statement had refuted the claim by the government saying “…there was no agreement reached, because offers by government failed to meet the legitimate demands of the association and we did not sign the purported document.

“Hence, our ultimatum stands as we cannot continue to borrow from banks to pay staff salaries.

“DAPPMAN’s demands made to the FG through the Honourable Minister of Finance and Debt Management Office was to pay cash and the total sum of indebtedness to marketers within the time frame.

“This was expressed in communication with the government, Ministry and other relevant office.”

“DAPPMAN has alerted the FG to this dire situation and specifically to the challenge our member companies face, leading to our inability to pay December 2018 salaries to our teeming work force without the immediate settlement of the debts owed by the FG.

“Most unfortunately, this has not been heeded.

“Since government globally is recognised as a continuum, FG is obliged to settle all legitimately incurred and verified Sovereign debts due to marketers promptly,” the oil marketers stated.