The federal government has said it would not ask oil marketers who are indebted to some government agencies to immediately offset their debts.
Some of the oil marketers owed billions of naira as subsidy claims, in turn owe various agencies of government such as the Federal Inland Revenue Services (FIRS) and the Asset Management Company of Nigeria (AMCON), different forms of debts.
However, the government said it has decided to give the oil marketers more time to settle their debts to the affected agencies, adding that if it push for the debts repayment now, most of the marketers would have nothing to take from the N236 billion it planned to pay them as first tranche of the subsidy claims.
The Chief Operating Officer (COO) Downstream of the Nigerian National Petroleum Corporation (NNPC), Mr. Henry Ikem-Obih, explained this after a recent meeting with the marketers in Abuja. He also disclosed that the NNPC has set out an alternative plan to ensure petrol supply across Nigeria would not be disrupted by the strike threat issued by the oil marketers over their demands to be paid the subsidy claims.
Ikem-Obih, said the government has resolved to pay the marketers part of what was owed to them, but that members of the Deport and Petroleum Products Marketers Association (DAPPMA) have insisted on going ahead with the strike because they do not trust the government to pay them as promised.
“What the Permanent Secretary of Finance Ministry has assured marketers is that for the first tranche of payment which will happen by Friday is N236 billion.
“Then, the marketers’ committee will meet with the ministry of finance to agree on the terms for the second payment in 2019.
“I want to emphasise that these marketing companies DAPPMA, MOMAN and in some cases IPMAN are indebted to government agencies – NNPC; AMCON and FIRS, but government has made a very conscious decision to say we should not recover government debt at this stage because if government goes ahead to recover what the marketers are owing government from this first payment a lot of them will not get anything,” Ikem-Obih said.
He further stated: “Government has said pay them the whole N236 billion, as we progress with further payments in 2019, government can start to recover her own position of what they owe government. “This N236 billion is what marketers would net and government would not take one penny from that.”
He further explained that the expected payment would come in the form of promissory notes from the Debt Management Office (DMO), adding: “These promissory notes are liquid assets which means they can be crystallised immediately after they are issued.”
“This is the position of government what marketers would get on Friday is like a cheque, it is not cash injected directly into their accounts it is what is equivalent to a cheque which is a promissory note.
“The subsidy scheme never paid cash but Sovereign Debt Bonds (SDB) but this government has said forget the SDB lets issue promissory note. Government has not changed on its position to issue through promissory notes,” he emphasised.
Speaking on why DAPPMA reportedly turned down the government’s promise and may go on with the strike, Ikem-Obih, stated: “We have heard the DAPPMA Executive Secretary say DAPPMA does not trust government. That government has said this before and not redeemed its commitment.
“As far as we are concerned, based on what we have seen, based on the effort that has been made, this is the most honest effort we have seen in a long time to actually pay this debt.”