Plans by major oil marketers to possibly down tools and sack their workers over unpaid fuel subsidy the federal government is owing them immediately raise concern over whether the nation will enjoy a peaceful end of year devoid of fuel scarcity. More deeply however is a stark reminder that government is yet again faced with its ageless albatross of failure to resolve malignant problems with operations of the downstream sector.
The federal government, indeed the entire nation should not disregard the warning by oil marketers to stop operations across the country, and to lay off their staffers, in response to non-payment of outstanding debts of about N800 billion arising from subsidy of the downstream sector. If the claims, and the planned action are genuine, ignoring them can lead to a compromise of the fuel supply situation.
And if that happens, Nigerians will undoubtedly be subjected to excruciating physical and emotional inconvenience in the days, may be weeks ahead. No one should allow this to happen to a polity as fragile and highly vulnerable as the country. Nigerians have not forgotten their ugly experience over intermittent industrial action by workers in the oil sector, which caused fuel scarcity along with its attendant hardship especially during festive periods.
Such experiences have become so commonplace in days leading to Christmas and New year festivities. To watch it happen again this year will most certainly destabilise the wobbly economic and social structure of the country and its teeming poor workers, let alone millions of unemployed citizens merely struggling to eke out an existence.
While giving the federal government a seven-day ultimatum to correct the anomaly, and pay the outstanding debts, the marketers, comprising Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs) also threatened that operations at depots across the country would be halted if government fails to act by the end of the ultimatum.
In addition, the marketers warned that they would likely disengage their workers en masse, to reflect their degenerating financial crunch. The Executive Secretary of DAPPMA, Mr. Olufemi Adewole said that the oil marketers on November 28, 2018 formally served notice of their decision on the Debt Management Office (DMO), the Minister of Finance, Chairman Senate Committee on Petroleum Downstream, Department of State Services and Minister of State for petroleum Resources.
In issue is the marketers demand that DMO pay marketers in cash for their outstanding foreign exchange differentials and interest component claims, together with amount already approved by the Federal Executive Council (FEC) and the National Assembly. Adewole emphasised that “marketers are not in a position to discount payment on the subsidy-induced debts owed as proposed by DMO.”
According to the official, the expected payment is made up of bank loans, outstanding administrative charges due to PPPRA, outstanding bridging fund due Petroleum Equalisation Fund, and in a few cases, AMCON judgement debts. He advised that the FEC-approved payment instrument – the promissory note – be substituted with cash and paid through the marketers’ bankers “to stop the avoidable waste of public funds through these debts-accruing interests.”
It would appear that having agreed to subsidise fuel importation, the federal government has no choice but to honour its debts to the marketers in a manner agreeable and useful to their continued operations. Besides, the fact that the lamentations of the marketers are verifiable, government is not essentially disputing the debts, but only insisting on paying back through promissory notes.
Ultimately government must blame no one but itself for failing to muster the political will to fully deregulate the downstream sector. Besides, government ought to apologise to Nigerians for the wrong impression it gave early at the administration’s inception, that the era of subsidy had been terminated, only for government to admit, a couple of years on, that it had accumulated huge subsidy.
When taken along with wide beliefs, matched by statistics, of the fuel subsidy being a huge financial scam that needed to be expunged from the nation’s books, it is hugely disappointing that a Buhari government of anti-corruption mandate allowed the cesspool of corruption to thrive this far. Sadly, Nigerians have been, and continue to be the victims of this failure.
Government should avert another round of fuel scarcity in the country, by meeting the demands of marketers. It should be reminded however that fuel subsidy will continue to undermine its best intention until government ensures local refining of petroleum products in sufficient quantity to meet local demands and eliminate dependence on fuel importation.
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