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Over N863b Subsidy: Senate Gives FG one week to meet with CBN, DMO, Stakeholders, Oil Marketers

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*** As Senators take a swipe at FG over nonpayment of Marketers

By Henry Umoru

ABUJA- THE Senate, Wednesday expressed its disappointment over Federal government’s inability to settle the outstanding subsidy payment that now stands at over N863 billion, with tendency to go beyond that if not paid.

The Red Chamber

According to the Senate, the oil marketers are Nigerians who must not be allowed to suffer due to this kind of treatment where the payment is foot dragging, just as it warned that the issue of subsidy has become a monster that if not addressed as quickly as possible, it would consume all Nigerians.

Speaking today in Abuja during a meeting with government officials and marketers on the issue of subsidy payment, Chairman, Senate Committee on Petroleum, Downstream, Senator Kabiru Marafa, APC, Zamfara Central so noted that some persons were behind the lingering crisis, however warmed that if it leads to fuel Scarcity and strike, he will not hesitate to run to President Muhammadu Buhari and intimate him of plans by some people to frustrate the government.

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Against this backdrop, the Senate Committee yesterday asked the Minister of Finance, Zainab Ahmed to mandate the Director- General Debt Management Office, Mrs Patience Oniha to call a meeting of stakeholders that would include the Central Bank of Nigeria, CBN and all the Oil marketers to find ways of addressing the problem.

According to the Senate, one major problem has to do with policy of government, just as it said that the government must as a matter of urgency, take the issue very seriously, adding that the Minister of Finance should address the issue of promissory note and revert back to it.

The Senate Committee has however asked them to report back next week Wednesday, just as the Committee will also have a Consultant that would work with them to have a common ground at nipping in the bud, the crisis.

Marafa said, “CBN and Ministry of Finance should immediately convene a meeting with all the relevant stakeholders here, including DMO or direct DMO to engage the marketers immediately to tell them the process involved, when and how they are going to finish.

“We want all of you to agree on something. Finance should also address the marketers concern over this promissory note. Some financial experts say it is the government that will absorb the discount, and some of them have raised this issue.

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“Our dear Minister, address these pertinent issues, do all these and revert to us within one week. We want to know what you people have resolved to do. This is a monster that will consume everybody if allowed. Let us put an end to it. If these marketers are lying with their claims, tell us. If they are  right, come out with tips by advising the President on what to do. Let us do away with this problem.”

Earlier in her presentation, the DG DMO, Mrs Patience Oniha,said, “The Minister of Finance made a presentation to FEC to cover the arrears of payment of claims to oil marketers is one out of about 10 that was submitted to FEC, that’s what the two chambers of National Assembly approved.

“On the part of the DMO, we know that NASS approved a limit, but in the council memo that was presented to FEC (this is was a unique case: arrears, not like we are borrowing money to finance the budget), there was a detailed process for the implementation.

“By the time the senate approved the one for oil marketers, we were already working and putting a framework in place which we submitted to the Minister of Finance to book early debt in whatever form, whether promissory note or anything, on the public debt stock, we need NASS’ approval. So, the approval of House of Representatives was only communicated in September. Let’s say we only approval in September.

“Like I said we had already started working. One of the conditions for payment included in the approval by FEC, was the appointment of an international audit firm who would do a review of the numbers, then after that we can proceed.

As the permanent secretary said, these are promissory notes. We are not paying in cash, if it were in cash it wouldn’t come to DMO, it would go for appropriation. It was sent to DMO for implementation because we are issuing a note that would then become part of the public debt stock.  These are notes we are going to issue, exchange obligations and it benefits the two parties, because it enables the federal government to know its total liabilities and for the beneficiaries, oil marketers to know they are holding government instrument, which the banks would accept rather than waiting for when to be paid.

“One of the key points the council noted is to ensure we get value for money, so we are paying persons that have provide services the right amounts due to them. That is why that condition was given by the council. We have had meetings with the parties that would enable us deliver us deliver on this, a key one is to appoint external auditors, and we have submitted a request to agencies that approve vendors and contractors.

“So, once we get that approval then we can start with the actual engagement with the oil marketers and other approved creditors that the National Assembly has approved. This is in line with the Public Procurement Act. We have drawn a timetable for implementation.

By the middle of November, we should be able to communicate with the oil marketers, first invite them to a meeting and run through the process structure. FEC approval didn’t say immediately NASS approves go back and issue them promissory notes, so, this is an information gap we need to fill. The DMO will run through with them.”

On his part, Olufemi Adewole, Executive Secretray, Deport and Petroleum Products Marketers Association of Nigeria, said, “The processes they have highlighted is 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. Marketers are in dire strait. I need to go over how many members of staff have been laid off as a result.

“Those affected are feeling the pain right now. Today is the end of the month, another cycle of interest will be put on those accounts tomorrow morning. Every single year we get alert of an increase in the interest tomorrow. These are needless expenses for the federal government. We are pleading that, we are at our wit end, we are pleading that whatever means, let us have this money.

“Giving us the promissory note that they are going to discount is like killing us twice because it is already a loss on us. Now, we are given promissory notes that we are going to be forced to discount. The CBN governor promised us then that banks would be advised to stop charging interest. We have written to him several times, nothing has been done. Pleading with you that we need this payment instruments like six months ago. The way banks harass our CEOs is embarrassing. ”

Also in his presentation, Chairman, Integrated Oil and Gas Limited, Capt. Emmanuel Iheanacho, said, “I listened very carefully to the chairman’s opening, where he traced the size of the debts starting from the quoted amount of N650 billion that was owed about two years ago, and that that debt was supposedly discounted in a very mischievous way to N29 billion, and from there the size was again discounted, we were not involved in any of the changes, to N386 billion.

I don’t understand how we can resolve this problem if we are dealing with numbers that have been pulled out of thin air, because if so many people are owed money where are you discounting it from? Is it from my money or the other guys’ money? I don’t know of any marketer who has agreed that the money he is owed is such that he can freely discount it because these monies are also owed to the banks.

“When our ES was speaking, he told you about companies that banks are sued, mine has been sued and injunction placed the day they an arbitrary report in the media that money was going to be paid N6.5 billion. We have a claim of N16.5 billion against the government.

Where is the N10 billion? Assuming the DMO pays us the N6.5 billion, they are claiming N11 billion from us. We don’t even have enough money to pay the banks. So, all these numbers being bandied around from N650 billion down to N386 billion, who did they speak to? I wasn’t invited to prove the basis upon which they could discount. Let’s go back and look at the original figure.

“The amounts you saw in the media were arbitrary. They are not related to anything that we can talk about. Chairman once told me to compile the list of everybody owed in one straight line, including subsidy, interest and differentials.

If you look at the numbers, you will be seeing about N1 trillion. Let us not sit down here and pretend that the money has been discounted. The debt is still being owed. If the government doesn’t pay us, we can’t pay the bank, and if we don’t pay the banks, they are going to seize our assets, and jobs are going to be lost. The economy is going to be worse for it.  So, let us go back and find who discounted it. “

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