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N800bn subsidy debts: Pay marketers within 2 weeks, Senate tells FG

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By Henry Umoru & Michael Eboh
•We’ve reached agreement with them — FG
•DAPPMA, MOMAN suspend strike threat
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BUJA — The Federal Government, yesterday, said it has reached an agreement with petroleum marketers on the settlement of outstanding fuel subsidy claims of over N800 billion.



The development came as the Senate yesterday asked the Federal Government to pay outstanding fuel subsidy arrears to oil marketers within the next two weeks.

Special Assistant on Media and Communications to the Minister of Finance, Mr. Paul Abechi, who disclosed news of the agreement in a statement yesterday, also stated that the petroleum marketers assured the public of availability of petroleum products, while operations at all depots and sales would continue until further notice.

He disclosed that the Federal Government had noted the concerns of the petroleum marketers, adding that government is currently undertaking a review of the initial mode of settlement agreed upon by both parties.

Abechi further stated that the marketers expressed satisfaction with the new arrangement being made by the Federal Government to settle their claims,

He quoted the petroleum marketers as saying: “The Depot and Petroleum Products Marketers Association, DAPPMA, Major Oil Marketers Association of Nigeria, MOMAN, and Independent Petroleum Marketers Association of Nigeria, IPMAN, with the Federal Government delegation meeting held at the Federal Ministry Finance in Abuja on Thursday, December 6, 2018, agreed that operations at all depots and sales will continue until further notice.

“After the meeting with senior government officials from the Federal Ministry of Finance, the Debt Management Office, the Nigerian National Petroleum Corporation, the Central Bank of Nigeria, the Budget Office of the Federation, the Office of the Accountant-General of the Federation and the Petroleum Products Pricing Regulatory Agency, we are satisfied with the arrangements being made by the government to settle the claims of petroleum marketers.

“The discussions showed that the government has considered the concerns and is reviewing the initial process approved for the settlement. We consider that this shows government’s responsiveness to the need for the claims to be settled in a timely manner.

“We, hereby, wish to reassure members of the public on the availability of PMS. We urge the public not to panic, as there will be no fuel scarcity. The engagement of the two sides will continue on Monday, December 10, 2018.”

FG should pay within 2 weeks — Senate

Meanwhile, the Senate has asked the Federal government to pay outstanding fuel subsidy arrears to oil marketers within the next two weeks.

The resolution is the latest move to avert a looming strike by the marketers who issued a seven-day ultimatum on Sunday.

In a motion yesterday, chairman, Senate Committee on Downstream, Kabiru Marafa, said there is an urgent need to avert looming crisis in fuel supply due to non-payment of accrued subsidy arrears to oil marketers.

Marafa said: “The Senate is aware that the Federal Government owed oil marketers subsidy arrears accruing from 2006 which led to the request by the President to the National Assembly for approval of the establishment of a Promissory Note Programme and bond issuance to settle inherited local debt and contractual obligations of which the subsidy arrears fall within.

“The Senate also notes that the debt have forced some marketers out of market while most of the marketers are currently being subjected to marinal injunctions.

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“The Senate recalls that the National Assembly processed and passed the President’s request on Wednesday 18, and Tuesday 24 July 2018 respectively.

DMO’s measures wrong, says Senate

“The Senate observes that after the passage of the executive request by the National Assembly, the Debt Management Office introduced very stringent measures for issuance of the promissory notes to include but not limited to; document reviewed by an international accounting firm, bonds to be issued in phases on the basis of discount with 10 years duration that is not interest-bearing without a fixed date for the issuance and reverse option for issuance of the note.

“The Senate also observes that the procedure of document review by an international accounting firm after it was authenticated by the Presidential Initiative for Continuous Audit approved by FEC and passed by NASS is a wrong process,” he read, from a prepared motion.

He noted that subjecting the payment to another set of rules after the presidential and National Assembly consent amounted to a “deliberate attempt to sabotage the government’s effort.”

He said the stringent rules of the DMO forced marketers to object to the processes and resorted to giving ultimatum to pay and revert to agreement made at a meeting with the Vice President, Yemi Osinbajo, in June 2017.

According to him, the debt profile has continued to increase due to forex differentials and interest rates accrued.

‘‘As we are speaking today, the debt profile, according to the marketer, is nearing one trillion naira. Unless this matter is looked into seriously, the debt profile will keep rising,’’ Marafa said.

The lawmaker noted that the strike, if hatched, might lead to artificial fuel scarcity, which may span through the election period.

In his contribution, Senate leader, Ahmed Lawan, blamed the situation on previous government, alleging that those laying claims to the subsidy were allies of the previous government.

DMO summons oil marketers over outstanding debts

He said:  “The N429 billion approved by FEC and endorsed by the National Assembly, we know where the money is going to. We know those who helped…We know there are people who helped the previous government but we never cared. Our concern is the ordinary people.”

On his part, Senator Yahaya Abdulahi alleged that those within the present government were the ones sabotaging it.

“I thought the money would have been paid since July but for the issue to come here again, it means …whoever is behind the non-payment does not mean well for this country.”

His position was corroborated by Barnabas Gemade who posited that the issue had gone beyond National Assembly input.

“A matter that has passed the required procedure and the only remaining duty is that of implementation and all agencies responsible for that are under the executive and we come here to do what is not our responsibility, worrying on who has not implemented.

“Is it the DMO that is stopping the payment, or the Central Bank or Ministry of Finance? All those do not answer to the National Assembly. I do not see why we should come here to urge the executive to do its work,’’ he said.

Senate makes 4 resolutions

After a long deliberation which centred mostly on shifting blames to government agencies delaying the payment, the lawmakers made four resolutions.

They urged the oil marketers to, as a matter of public interest, rescind their decision on the ultimatum to allow the federal government more time to look into their demand, engage with the DMO to determine an appropriate financial instrument for the repayment of the debt.

The senators also urged the Federal Government to engage marketers and agree on outstanding liabilities to put an end to these subsidy claims and direct all concerned agencies to immediately pay the subsidy arrears as approved by Federal Executive Council, FEC, and passed by the National Assembly.

Only on Wednesday, the Debt Management Office, DMO, and Finance Ministry invited the marketers to Abuja for a meeting to iron out issues relating to the matter.

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