Days after oil marketers issued a seven-day ultimatum to demand payment of the N800 billion outstanding subsidy debt under the Petroleum Support Fund (PSF), the federal government said it offered the marketers N340 billion in promissory notes.
Minister of Finance, Hajiya Zainab Ahmed, disclosed this in a response to Premium Times enquiries on Tuesday, assuring the payment would come in the form of promissory notes to be issued to the marketers “in a few days time.”
She said, while government got approval of the National Assembly to make the payment, the marketers rejected the offer.
They had warned in a statement on Sunday of an impending withdrawal of services if government failed to meet their demand in cash.
The marketers, under the aegis of Depot and Petroleum Products Marketers Association (DAPPMA) and the Independent Petroleum Products Importers (IPPIs), 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.
The legal adviser to IPPIs, Patrick Etim, had threatened that members would disengage their workers, and obstruct further loading of petroleum products from the depots across the country, if their demands were not met.
“The oil marketers have requested that foreign exchange differential and interest component of government’s indebtedness to marketers be calculated up to December 2018, to be paid within the next seven days from the date of the letter sent to them,” Etim said.
Director General, Debt Management Office, Patience Oniha, confirmed that apart from consultative meetings between the relevant government representatives and the marketers, an approval process for the payment of the debt has already been set in motion.
“Government is looking at it (payment of debt). I can’t talk with you about anything concrete that has not yet been approved. But, be assured government is doing something,” she told Premium Times.
However, the Executive Secretary of DAPPMA, Olufemi Adewole, told our reporter that 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,” Adewole said.
He further said despite the National Assembly’s approval, the DMO said the debt figures would have to be reviewed again, with each marketer expected to discount part of the claims to government before promissory notes with tenors covering between one and 10 years, will be issued.
Asked to explain what marketers understood by the demand by DMO for discount on the debt, the DAPPMA scribe said they were told it would involve forfeiting part of the debt to government before payment could be approved.
He did not say what percentage would be forfeited. The finance minister did not comment on this when contacted.
However, Adewole said his members have already rejected the proposal by government to pay them with promissory notes.
“With bank interest rate going at 22 per cent annum, at the current inflation and naira devaluation rates, the value of the money to be paid to marketers will become useless by the time promissory notes become due for payment,” he noted.
Meanwhile, the Nigeria National Petroleum Corporation (NNPC) has assured that it has 170 million litres of petroleum products in some of its depots across the country.
Managing Director of the Petroleum Products Marketing Company Limited, Umar Ajiya, who gave the assurance when he appeared before the House of Representatives Committee on Petroleum (Downstream) yesterday in Abuja, assured that there will be adequate supply of petroleum products during the festive period.
Ajiya maintained that regardless of the situation, the corporation has a robust arrangement to ensure zero-scarcity of petroleum products during the forthcoming festive season and beyond.
He explained that the stock of products is stored in the NNPC depots, which he said, underwent successful rehabilitation and are put back to use, along with connecting pipelines, to forestall dependence on private sector depots for products storage.
The PPMC boss further said the rehabilitation of the products storage depots were part of measures deployed by the corporation to avert any form of supply challenges during the festive period.