Days after oil marketers issued a seven-day ultimatum to demand payment of the N800 billion outstanding subsidy debt under the Petroleum Support Fund (PSF), the federal government said it offered the marketers N340 billion in promissory notes.
The Supervising Minister of Finance, Zainab Ahmed, who disclosed this in a response to PREMIUM TIMES enquiries on Tuesday, said the payment will come in the form of promissory notes to be issued to the marketers "in a few days' time".
She said the government got approval of the National Assembly to make the payment.
The marketers have, however, rejected government's offer.
They warned in a statement on Sunday of an impending withdrawal of services if government failed to meet their demand in cash.
The marketers, under the aegis of Depot and Petroleum Products Marketers Association (DAPPMA) and the Independent Petroleum Products Importers (IPPIs), said the only way to avert grounding the fuel supply system was for government to pay the outstanding debts in cash.
They said other forms of payment instrument (like promissory notes) that may be available would not help them meet the immediate challenge of settling workers' salaries and sundry obligations.
The legal adviser to IPPIs, Patrick Etim, had threatened the members would disengage their workers, and obstruct further loading of petroleum products from the depots across the country if their demands were not met.
"The oil marketers have requested that foreign exchange differential and interest component of government's indebtedness to marketers be calculated up to December 2018, to be paid within the next seven days from the date of the letter sent to them," Mr Etim said.
Government Consulting - DMO
The director general, Debt Management Office (DMO), Patience Oniha, confirmed that apart from consultative meetings between the relevant government representatives and the marketers, an approval process for the payment of the debt has already been set in motion.
"Government is looking at it (payment of debt). I can't talk with you about anything concrete that has not yet been approved. But, be assured government is doing something," she told PREMIUM TIMES on Tuesday.
Mrs Oniha, however, denied insinuations the DMO was the government institution responsible for verifying the marketers' debts for payment.
Although she referred our reporter to the Petroleum Products Pricing Regulatory Agency (PPPRA) for clarification on the exact debt figures, none of the officials of the agency agreed to speak on record.
DAPPMA Rejects Promissory Notes
However, the Executive Secretary of DAPPMA, Olufemi Adewole, told our reporter that since the ultimatum was issued by the marketers, no government agency representatives, except the State Security Services (SSS) that invited them, have held any meeting to discuss the issues.
"They have been consulting among themselves. For us (marketers), we have highlighted our challenges since the last five years. Whatever is being done now is a continuation of what was suspended in January when the initial warning was issued.
"The government promised the issues will be fully addressed. All what the marketers want to hear today is an alert from the banks that their accounts have been credited," Mr Adewole said.
He countered the finance minister's claim that government just received National Assembly approval to settle the debts.
He said apart from the Federal Executive Council (FEC) approval since June 2017, the lawmakers got the document last January before giving a final approval for payment on September 26.
According to Mr Adewole, since the National Assembly approval, the DMO said the debt figures would have to be reviewed again, with each marketer expected to discount part of the claims to government before promissory notes with tenors covering between one and 10 years, will be issued.
Asked to explain what marketers understood by the demand by DMO for discount on the debt, the DAPPMA scribe said they were told it would involve forfeiting part of the debt to government before payment could be approved.
He did not say what percentage would be forfeited. The finance minister did not comment on this when contacted.
However, Mr Adewole said his members have already rejected the proposal by government to pay them with promissory notes.
"With bank interest rate going at 22 per cent annum, at the current inflation and naira devaluation rates, the value of the money to be paid to marketers will become useless by the time promissory notes become due for payment," he noted.
"The money the marketers are expecting does not belong to them. It consists unpaid administration charges PPPRA for 2015, 2016 and 2017; Petroleum Equalization Fund (PEF) charges and Asset Management Company of Nigeria (AMCON) debts.
He blamed the delay in verification of the debts by the DMO to accountability procedures and processes established by the immediate past finance minister, Kemi Adeosun.
Mrs Adeosun had insisted claims by the marketers must first be audited by an internationally acclaimed auditing, law or financial institution to ascertain their genuineness, before final approval by the Bureau of Pubic Procurement (BPP) for payment.
MOMAN Distances Self From Ultimatum
The Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Clement Isong, who also spoke with PREMIUM TIMES on the issue, denied his organisation was party to Sunday's ultimatum issued to the government.
"MOMAN has never been part of the marketers groups that issued the ultimatum to the federal government. Issuing of ultimatum for strike is not part of MOMAN's mode of operation.
"MOMAN, which is quoted in the Nigerian Stock Exchange, and has some foreign membership, cannot be part of any action that can jeopardise the Nigerian economy.
"That does not remove the fact that MOMAN wants the money government is owing its members. But, our strategy to get our money is always persuasive," Mr Isong said.
He gave the government's outstanding debt to MOMAN at about N130.7 billion.
MOMAN has the six major marketing firms, including Mobil, Conoil, OVH Energy, Forte Oil, MRS Oil and Total Nigeria Plc as members.
Mr Isong confirmed attending a meeting with DMO on November 27, where government made proposal to issue promissory notes to marketers as payment for the debt.
During the meeting, he said many of the marketers, particularly DAPPMA members, rejected government proposal, as many said they have either shut down their depots already or disengaged some of their staff, following the seizure of their investments over debts.
Why Marketers Reject Notes
He explained that marketers were rejecting promissory notes to be issued by government, because they did not amount to anything other than mere acceptance by government that it was owing the money and would pay over a certain period in future.
"The promise is worth nothing unless government says during the period it says it will pay, it will do so along with a competitive interest rate on the debt capital. With such condition, the marketers can take it to the bank to buy it as an investment.
"If interest is not going to be paid, with inflation, devaluation of the naira and the state of the economy, the money will be useless. The banks they are owing will not even accept it. Any promissory note not linked with an interest rate is not useful to anyone," Mr Isong noted.
NNPC Vows Adequate Products Supply
Regardless, the Nigerian National Petroleum Corporation (NNPC) assured yesterday it has enough stock of petroleum products to meet a minimum sufficiency supply level capable of lasting for about 30 days.
Its spokesperson, Ndu Ughamadu said on Tuesday in response to PREMIUM TIMES enquiries, NNPC was engaging with the marketers, finance ministry and DMO on the various issues.
He said going by positive outcomes from those engagements, the NNPC remained optimistic of a prompt resolution of the contention.
"No cause for worries. We have a robust fuel stock and high sufficiency level. Consumers should not panic," Mr Ughamadu said in a text message to our reporter.
At the moment, NNPC is the sole importer of petroleum products in Nigeria. But, it relies on privately-owned depots and retail outlets to store and distribute products to the final consumers across the country.
Mr Ughamadu did not say how government, through the NNPC, would cope with the storage and distribution of its imported volumes of petroleum products in the event of the closure of the depots by their private owners and withdrawal of services by tanker drivers over the debt dispute.