The Federal Government’s debts profile on fuel subsidy and taxes to major marketers of petroleum products in Nigeria have hit N130.7 billion mark.
Major Oil Marketers Association of Nigeria (MOMAN), which declared this maintained that the amount was the harmonized figure as at August 2018 after over four years of absolute drought in payment of the outstanding money on subsidy.
Addressing a press conference in Lagos on Monday, Chairman of MOMAN, Mr. Andrew Gbodume, who noted that the subsidy trapped in the government’s coffers was credit facilities from banks, stated that the lenders have now embargoed credit facilities to oil marketers.
“Now some of our members find it difficult to pay salaries, whereas we are bound to review salary of our staff at a minimum interval of every two years,” he said.
One of the major challenges the Nigerian downstream petroleum sector is still facing, according to Gbodume, is the non-payment of the long outstanding fuel subsidy to oil marketers.
Banks, he said, are no longer willing to assist in providing further credit facilities to us. The nonpayment of outstanding subsidy funds is affecting our businesses. Kindly note that the facilities extended by banks must be serviced regularly..
“We appreciate the efforts of the National Assembly but the non-payment creates a significant negative impact on the operational efficiency of the downstream sector of the oil industry, thereby placing a severe strain on its efforts to continuously 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.
Corroborating Gbodume’s view, Executive Secretary of MOMAN, Mr. Clement Isong, added that the debts on subsidy plus interest as at August 2018 stood at N130.7 billion. The figure on tax continues to move and as we speak it must have been more than this,” he said.
Stating that the current model is unworkable and unsustainable, Isong, who expressed optimism over payment of the outstanding by government, commended the Pipelines and Products Marketing Company (PPMC) for quality of planning, which he described as impeccable.
“We cannot but acknowledge and appreciate the efforts of PPMC over the last few months in ensuring consistent supply of petroleum products within the country. PPMC has demonstrated its resolve in guaranteeing a non-repeat of the scarcity the nation experienced at the end of 2017 and quite frankly has done well so far.
“However, with NNPC being the sole importer and supplier of petroleum products in Nigeria at the cost incurred, it should be clear to all Nigerians that this policy direction is not sustainable.
“We believe the path to fully achieving a sustainable operating environment for the Nigerian petroleum industry begins with the downstream private sector. We feel the time is now to encourage a well informed and honest debate amongst ourselves as Nigerians on our downstream pricing policy, showing sensitivity to the fears of Nigerians and the challenges we face as a people and as an economy to arrive at an equitable but sustainable business model.”
Unveiling the transformation of MOMAN, Isong said: “In order to achieve the core values of Safety, professionalism, integrity and transparency, the CEOs of MOMAN decided on a change in strategy towards greater collaboration and co-operation with the authorities and other stakeholders.
“With their collective depth of expertise, access to technology, intellectual and other resources (locally and internationally), the downstream petroleum industry private sector is best placed to correct the downstream slide the [petroleum sector has suffered.
“MOMAN is repositioning itself to take advantage of its combined knowhow and operational synergies to partner with Ministries, Departments and Agencies (MDAs) and other downstream stakeholders such as the NNPC, the PPMC, the Department of Petroleum Resources (DPR), the Petroleum Products Pricing Regulatory Agency (PPPRA), the Federal Road Safety Corps (FRSC) among others, through several initiatives, to develop and promote standards in the industry, drive business efficiencies, identify logistics opportunities and lead the industry in raising and meeting international standards and make meaningful contributions to the safety.”
