How CBN helped marketers collect N236bn: Fuel Subsidy Debt
Petroleum products marketers on Monday confirmed they were able to collect the N236 billion promissory notes issued by the government last Friday for their outstanding subsidy debts, following key concessions granted by the Central Bank of Nigeria (CBN).
The executive secretary, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole, who confirmed the federal government made good its promise to pay the oil marketers latest last Friday, said this would not have been possible without the CBN intervention.
“I can confirm to you government made good its promise to deliver promissory notes to marketers on Friday. Our members have been collecting it,” Mr Adewole told PREMIUM TIMES in an exclusive interview.
“We appreciate government’s gesture, especially the president, who stepped in and the effort of the Senate Committee on Petroleum (Downstream) to ensure the matter was resolved amicably speedily. But, let me say that this would not have been possible if the CBN governor did not intervene the way he did.”
According to the DAPPMA scribe, the CBN governor, Godwin Emefiele, intervened by approving two key concessions that made it very easy for the marketers to get value on the promissory notes.
Apart from the approval for the banks to retroactively suspend the accumulated interest on the loans from June 2017, Mr Adewole said the CBN also directed the banks to ensure the promissory notes had immediate liquid access value.
He said, with the CBN’s directive, a marketer can collect the Naira equivalent of the promissory note of the same value, if it has a facility with a bank.
“The CBN told the bankers who were present at the reconciliation meeting last week to ensure payments were made based on letters of Credit (LCs) issued by marketers and the exchange rate as well as additional financial exposures different from the N197 exchange rate they were paid,” he said.
“The interest on the loan will now be calculated from the date of liquidation to June 2017 and a submission put together and given to PICA (Presidential Initiative on Continuous Audit) and the Executive Council of the Federation (FEC) for approval, before sending to the National Assembly for final approval, to ensure everything was resolved,” he explained.
On the total outstanding subsidy debt due to the marketers, Mr Adewole said although government approved about N729 billion to be paid to them, the National Assembly approved N348 billion, which was confirmed by FEC, for payment.
However, following another audit on the debt claims by PICA, he said the amount was reduced on paper to about N236.99 billion, while what the marketers are actually collecting is far lower.
Based on the outcome of their meeting with government representatives on July 10, 2017, Mr Adewole said marketers agreed for government to deduct all their outstanding debts to its agencies before being paid.
The outstanding debts included administrative charges to the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Petroleum Equalization Fund (PEF) as well as bad loans to the Asset Management Company of Nigeria (AMCON).
Although he said marketers were happy with what they received so far, Mr Adewole said no fewer than ten of their colleagues were paid nothing after government deducted their debts to those agencies.
He said the concern of the marketers now bordered on the records used by PICA to audit their claims, which they said were largely not updated.
“It is good the debts to the government agencies have been settled. But, the challenge now is that PICA’s records on some of these debts have not been updated. Some of the marketers had to go to the NNPC (Nigerian National Petroleum Corporation) to get clearance letters on the deductions that accompanied their promissory notes.
“About ten companies were not paid anything at all, despite having claims, due to this issue,” he noted.
He said marketers have resolved to write to the government to make their observations known to the Debt Management Office (DMO), the Federal Ministry of Finance and PICA.
According to him, there was the need for a statement to be issued by these agencies to clarify to the affected companies the deductions made from their pay.
To reconcile the balance of the debt due to the marketers, Mr Adewole said some of their representatives were already in Abuja since Friday, to reconcile the records with the government.
On the impact of the threat issued by the marketers, Mr Adewole said if their matter received the kind of attention they have now gotten, the situation would not have degenerated to this level.
“It was as if we were talking to people who were not responsive, until that ultimatum was issued. All Nigerians were looking for a beautiful Christmas. With what has happened, I believe we will still be able to achieve that,” he said.