Oil marketers under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) and Depot and Petroleum Products Marketers Association (DAPPMA), have appealed to the federal government for prompt payment of over N800 billion outstanding subsidy claims owed them to save the downstream sector from total shutdown of operations.
The duo made the appeal yesterday in a joint interactive session with journalists in Lagos.
Executive Secretary, MOMAN, Mr Cement Isong, appealed to the federal government to hasten payment of the outstanding debts of fuel imports subsidy arrears owed the marketers.
He noted that the continued non-payment of the claims has severely limited their access to credit and negatively impacted their working capital leading to their inability to pay their banks and their service providers.
Isong urged the government agencies concerned to address the bureaucratic bottlenecks causing the delay in the payment process, adding that the delay in payment of the debt has resulted in the degradation of the downstream subsector of the oil and gas industry, and affected the marketers’ business operation.
He said MOMAN is a downstream oil and gas group made up of six major marketers which include: 11 Plc (formerly Mobil Oil Nigeria), Conoil Plc, OVH Energy Marketing Limited, Forte Oil Plc, MRS Oil Nigeria Plc and Total Nigeria Plc.
According to him, the major challenge the Nigerian downstream petroleum sector is facing is the non-payment of the long outstanding fuel subsidy to oil marketers.
“We appreciate the efforts of the National Assembly and the Federal Executive Council in approving payment but the non-payment creates a significantly negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on its efforts to continually invest in infrastructure and raise industry standards. We hope that the debts will be paid in full to the oil marketers as soon as possible,” he said.
The MOMAN scribe said that the debt owed MOMAN members alone stood at over N130.7 billion as at August 2018.
Similarly, the Executive Secretary, Deport and Petroleum Products Marketers of Nigeria, Olufemi Adewole, said the processes highlighted for payment by the government were inimical to the operations of their businesses.
Adewole said: “The processes they have highlighted are killing our businesses. Immediately the banks read in the media that the National Assembly had approved, they went to court, got injunction and seized our assets.”
Adewole said 60 per cent of marketers have been forced out of business as banks have taken over their depots, assets and properties due to their inability to pay back monies borrowed to import fuel.
He said many marketers were forced out of business, while others are struggling to survive due to the government’s inability to settle the subsidy arrears, saying the development is threatening investment in the downstream subsector.
The DAPPMAN scribe said, although, the Federal Government has earmarked money to clear the debts, the marketers were yet to be paid.
“The debt has had very adverse effects on our operations. I am aware of two depots that have been forcibly taken over by banks because they got injunctions from the courts. They did so the moment they heard that the National Assembly approved payment of the debt to marketers. Unfortunately, as at today the money was yet to get into our accounts.”
He said the other challenge is that many of the marketers have laid off more than 90 per cent of their staff because of financial constraints.
Adewole however said that the government has promised that part of the money would come as promissory note and cash saying the information gathered was that the government may pay only in promissory note.