Economy

FG owes N300bn subsidy to oil marketers

by KEHINDE AKINTOLA

February 23, 2017 | 7:09 pm
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…as Reps threaten to arrest 4 CEOs of major oil companies, blacklist defaulters from lifting of petroleum products

 

Major oil marketers on Thursday accused Federal Government of owing over N300 billion under the subsidy regime between 2014 and 2015.
Representatives of the major oil marketers disclosed this during the investigative public hearing held by Ad-hoc Committee mandated to investigate the alleged N500 billion debt and criminal act of sabotage by major oil marketers in connivance with Petroleum Products Marketing Company (PPMC), chaired by Abdullahi Gaya.
Worried by the spate of disregard for the Ad-hoc Committee, the lawmakers threatened to issue warrant of arrest against Chief Executive Officers of Oando, Capital Oil, Conoil and Master Energy if they fail to appear on Monday, 27th February, 2017.
The committee also threatened to issue directive to PPMC and relevant agencies to stop forthwith sale of petroleum products to defaulting major marketers pending the payment of all outstanding debts.
In his presentation, Akin Akinfemiwa, Group Chief Executive Officer of Forte Oil Nigeria, disclosed that Federal Government is yet to pay outstanding sum of N13.8 billion subsidy against the N5.9 billion which Forte Oil owes Petroleum Pipelines Marketing Company (PPMC) from the petroleum products lifted.
He said: “from our records, as at January 31, out indebtedness was to the tune of N5.995 billion. But we’re being owed N13.8 billion from subsidy. This is part of the over N300 billion the government is owing different oil companies.”
Akinfemiwa however noted that efforts are ongoing to ensure the payment of the debts.
“So far, the government, led by the Chief of Staff to the President invited us to a meeting with other stakeholders to address two issues. One was to continue petrol supply and two was for Federal Government to pay its debts.
“Under the debts, a committee was set up to settle them. The total stands at over 300 billion. Right now, we can’t even do much, but we don’t want a situation where there’ll be queues in the country.
“If you look a the N13.8, we’re the ones being owed about N8 billion. We have also written to the Senate in recent times where we asked them to assist us with the payments of subsidy. The banks are not even borrowing as at now. We even paid about N5 billion as at the end of December,” he said.
In his response, Mr Akinfemiwa said the agreement they had was for debts on oil lifting to be paid in 15 days, saying “even if you lift N500 billion worth of oil, you need to pay within 15 days. Ideally, we should have reviewed the agreement terms after the fuel price increase from N87.5 to N145.”
On the security of the debts, he said, most of the companies are known, “so most of the time, the security is the company, which is like the company guarantee. On selling, we sell both on credit and sometimes not.
“We don’t sell directly to individuals, we sell to dealers. Since 2015, we had a situation where we migrated more to credit dealers because of the situation in the country. We’ve seen a shift from cash and carry to credit.
“We have about 500 retails outlets spread across Nigeria. We have that capacity. We are being hampered by cash flow reasons. We have about 12-13 percent market share in the industry,” he said and promised to send the details of the company’s dealers to the committee.
“With respect to N5.9 billion, I think the executive arm’s committee finishes its work in the next two and half weeks before we can talk about paying. We’ll continue to pay what we can till we’re able to liquidate the debts,” he said.
Some of the lawmakers who spoke at the investigative public hearing including Bode Ayorinde (APC-Ondo), Henry Nwaoba (PDP-Imo) expressed concerns over the discrepancies between the report submitted by PPMC and major marketers on the debt portfolio.
Ayorinde said: “from this paper, you’re owing N5.955 billion, did your agreement give room for debts? What’s the circle of the debts? What is the security for the debts? What is the interest agreed to be paid on outstanding debts? Do you sell on credits to those who buy from you?”
On his part, Phillip Torres, Managing Director of Total Nigeria explained that the company and PPMC are still in dispute over the sum of N309 million while the outsnding balance owed PPMC stands at N61 million.
He also denied the report submitted by PPMC on the sum of N1.352 billion allege owed by Total Nigeria. To this end, the committee resolved to invite PPMC and Total Nigeria, on Monday, 27th February 2017 to reconcile the account.
Also speaking, Ini Ufot, Managing Director of Mobil representative, assured that the N1.5 billion outstanding debt will be paid on Friday, 24th February 2017 adding that the company paid all the interest for default in payment beyond the 15 days and 40 days.
He explained that the company paid the sum of N3.1 billion in January 2017.
In his submission, Andrew Gbodume, Managing Director of MRS Oil disclosed that the company paid the sums of N29.1 billion in 2011; N29.7 billion in 2012; N44.1 billion in 2013; N40 billion in 2014; N33.9 billion in 2015; N59.6 billion in 2016 and N9.5 billion between January and February 2017.
conomy
He however noted that Federal Government is owing the company N18.9 billion adding that the 1.720 million litres of PMS SWAP requested for by NPMC during fuel crisis in December 2015 has not been returned to the company.
To this end, the committee requested for evidence of payment through REMITA and other relevant documents on payments to PPMC and other relevant government agencies.

by KEHINDE AKINTOLA

February 23, 2017 | 7:09 pm
12893  |   93   |   0  |   Start Conversation

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