Subsidy Debt: FG, Oil marketers avert yuletide fuel crisis

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Both the federal government and Nigerian oil marketers reach an agreement on how offset the N800 billion being owed by the government so as to make fuel available during end of the year celebrations

By Anayo Ezugwu

After rejecting initial offers from the federal government, oil marketers have agreed to suspend their planned industrial action over N800 billion subsidy debts.  The marketers on Thursday, December 6, agreed with the government on how the outstanding fuel subsidy claims will be settled.

The agreement was reached after a meeting held at the headquarters of the Ministry of Finance. A statement from Paul Ella, media adviser to the minister of Finance, explained that the marketers assured the government that operations at all depots and sales will continue until further notice.

This agreement means that Nigerians will celebrate the festive period without witnessing any fuel scarcity similar to that of December 2017. The marketers, under the aegis of Depot and Petroleum Products Marketers Association, DAPPMA, and the Independent Petroleum Products Importers, IPPIs, had on Tuesday, December 4 rejected N340 billion in promissory notes offered to them by the government. The marketers said the only way to avert grounding the fuel supply system was for government to pay the outstanding debts in cash.

They said other forms of payment instrument (like promissory notes) that may be available would not help them meet the immediate challenge of settling workers’ salaries and sundry obligations. Olufemi Adewole, the executive secretary, DAPPMA, said since the ultimatum was issued by the marketers, no government agency representatives, except the State Security Services, SSS, that invited them, have held any meeting to discuss the issues.

“They have been consulting among themselves. For us (marketers), we have highlighted our challenges since the last five years. Whatever is being done now is a continuation of what was suspended in January when the initial warning was issued. The government promised the issues will be fully addressed. All what the marketers want to hear today is an alert from the banks that their accounts have been credited,” he said.

The Senate also on Thursday, December 6, asked the marketers to give the federal government more time, to resolve the issue of unpaid subsidy. After deliberating on the letter sent to the Senate by the marketers, the red chamber said the government will need more time to look into their demands.

The Senate presided over by Ike Ekweremadu, the deputy Senate president, resolved to “urge the oil marketers as a matter of national interest to rescind the earlier decision on the one week ultimatum to give the federal government a little more time to look into their demands. Urge the federal government as a matter of urgency to direct the relevant agencies to pay the subsidy arrears as approved by the Federal Executive Council and National Assembly within two weeks. And urge the federal government to engage marketers and agree on the subsidy claims to avoid these crises.”

Likewise, Tony Edeh, a financial expert, urged the federal government to resolve issues with oil marketers to ensure availability of fuel during the yuletide. He warned that if the threat given by the oil marketers was carried out, economic activities during yuletide might be paralysed.

According to him, December is usually a celebratory period for Nigerians hence threat to go on strike by oil marketers will disrupt economic activities. He said December is also a period to boost the economy due to increased activities taking place nationwide, adding that fuel scarcity scare could cause widespread panic.

Edeh noted that fuel scarcity could also affect the economy as most people would be grounded, in addition to the unavoidable hike in the prices of goods and commodities. “Though, their reason for requesting full payment during this period or any other period is justifiable, I do not think they will get all they are asking for, and they know this too.

“For the adverse effects or the untold hardship that the strike will cause, an agreement could be reached by both parties, some payment made and more promissory notes handed out but full payment is most probably out of the question,” he said.

Also the Independent Petroleum Marketers Association of Nigeria, IPMAN, condemned the strike threat by some oil marketers, describing the threat as an act of sabotage. Danladi Pasali, the national secretary, IPMAN, in a statement said the threat was an attempt to disrupt the relative peace in the downstream oil sector.

Pasali described the seven-day ultimatum as an act of intimidation and an attempt to frustrate the effort by government to ensure that Nigerians have a hitch-free Yuletide. He also urged Nigerians not to panic over the threat, stating that at the moment, the Nigerian National Petroleum Corporation, NNPC, controls majority of the fuel available in the country and is nearly the sole importer of the products.

According to him, it is unfortunate that some groups are more concerned about their personal interest, above national interest. He noted that though it was good for the marketers to ask for their rights, but taking such decision to shut down the petroleum sector at this period of festivity is an act of sabotage.

In any case, the NNPC has assured it has enough stock of petroleum products to meet a minimum sufficiency supply level capable of lasting for about 30 days. Ndu Ughamadu, the spokesperson of the corporation, said the NNPC was engaging with the marketers, finance ministry and DMO on the various issues.

He said going by positive outcomes from those engagements, the NNPC remained optimistic of a prompt resolution of the contention. “No cause for worries. We have a robust fuel stock and high sufficiency level. Consumers should not panic,” he said.

– Dec. 7, 2018 @ 17:19 GMT |

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