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Published On: Tue, Dec 11th, 2018

Subsidy: Pay N800bn debt with excess crude earnings, Reps tell FG

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Oil prices rise back above $70 a barrel

By Umar Muhammad Puma and Christian Ekpan

The House of Representatives Committee on Petroleum (Downstream) has urged the federal government to use money from the excess crude account to settle subsidy debts.
Rep Joseph Akinlaja (LP, Ondo), committee chairman, started this yesterday while reacting to the plan strike by the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) across the country.
While urging government to not let outstanding debts to marketers degenerate further than it already is, Hon. Akinlaja said: “It was because of exigencies like these that we in the National Assembly always use our wisdom to always create a gap between the actual crude price and the benchmark.
“If you can see the 2018 budget, we set the crude benchmark at $40 per barrel, and as we speak, crude is above $50 which means we are selling in excess of at least $10 per barrel. Naturally, government is supposed to fall back on the excess to take care national emergencies.
“So why can’t they take money from the excess crude account and settle subsidy debts to marketers? Do we have to wait until they issue threats before we start running round to see how they can come for another round of negotiations?”, the lawmaker wondered.
He also called on the executive arm to ensure that it keeps to its own side of the agreement reached with marketers.
The lawmaker also appealed to one of the parties in the negotiation, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) to sheath its sword and allows government to fulfill its promise of making part payment by Friday.
DAPPMAN had rejected terms by government to allow it pay by installment until the over N800 billion is cleared, whilst appealing that products be made available to Nigerians to facilitate peaceful and comfortable Yuletide.
He said the attitude of government towards agreements has led to so many companies in the downstream sector to close up due to mounting debt burden arising from un-serviced bank loans.
“It’s the same with budget implementation which is not always seen through. Because capital projects are not always funded, there’s joblessness in town. And you’re building an army of unemployed youths”, he added.
Asked if there’s any possibility for tension with marketers, despite NNPC’s assurances that there’s nothing to worry about, the committee chairman said the situation is precipitated by the emergence of multiple unions in the downstream sector of the industry.
“Now you hear different branches of the unions making threats and stoking fears in the populace. If you can recall, by this time last year, there was tension of fuel scarcity which led to panic buying that lasted from one week to at least three months.
“That situation made some of us to keep vigil and the NNPC creating what it called a ‘war room’ where it monitored and coordinated efforts at curbing the scarcity.
“But this year, during our oversight to the NNPC, I asked questions regarding the situation – and if there are possibilities of another scarcity – and they said there’s no cause for alarm.
“Now, there’s some level of anxiety; and what’s the cause, the government is owing marketers. Now they called a meeting where all marketers were invited to tender their concerns; and they said interests on outstanding loans were drowning them; and government gave an assurance of intervening with the banks to put moratorium on interests.
“But it’s been 7 months now; and the money has not been paid, which led to the 7 days ultimatum given that will expire today (Monday).
“But meetings have been held among stakeholders and the parties have agreed to meet each other half way – that was 4 days ago. So, our committee is appealing to the government to keep its own part of the agreement, because as we speak, AMCON (Assets Management Company of Nigeria) has taken over some of these marketing companies, due to bad loans they have been unable to pay.
Others who haven’t been taken over are getting drowned by interest on the loans they took; and government is asking them not to complain.
“You can’t beat a child and ask him not to cry. So, let government fulfills its obligations to the marketers,” Adelaja stressed.

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