The House of Representatives investigating the huge debts owed to the Pipelines and Products Marketing Company (PPMC) by oil marketers has heard that the subsidiary of Nigerian National Petroleum Corporation (NNPC) is being owed about N7.6 billion by Oando Plc, and Conoil.
The committee at the resumption of sitting frowned on the development, attributing it to a lack of clearly spelt out penalties for those who default on payments.
The lawmakers lamented that many of the marketers were guilty of continuous and deliberate breach of the 15-day credit line for lifted products.
The Hon. Mahmud Gaya – led committee therefore directed Oando with a debt of N4.5 billion to PPMC, to expediently honour its agreements, or risk being cut off oil supplies.
Similarly, Conoil, which owes N3.1billion to the PPMC, was directed to pay at least 50 percent, failing which, the oil firm would also be stopped from accessing oil products.
Gaya also gave the assurance that the terms of accessing oil supplies from the PPMC by oil marketers would be reviewed to prevent the marketers from holding on to public funds.
“Because there is no well spelt terms on penalties for default, we found out that Conoil was last penalised for default in 2012, for instance. We discover that a revolving credit facilities given to Conoil allowed it to owe with credit line for two weeks but it has defaulted for over two months since the end of December 2017. Yet, it continues to lift products from PPMC,” the Chairman said.
“Is it fair to owe such a huge amount of Nigerian money? The country cannot move forward when this is happening. It is not impossible that they deliberately divert the money to other businesses since they know there is no penalty,” Gaya declared.
Meanwhile, Hon. Jarigbe Agom Jarigbe (Cross River PDP) who moved the motion that mandated the investigative hearing, appealed to the federal government to urgently clear the subsidy debts owed to the marketers.
The marketers at last week’s hearing had claimed they were being owed about N300 billion in subsidy payments for 2014-2015 by the government. The Group Chief Executive Officer (GCEO) of Forte Oil Nigeria, Mr. Akin Akinfemiwa, at the hearing put the subsidy outstanding claims owed his company at N13.8 billion.
Jarigbe, speaking with THISDAY in an interview, said the committee set up by the government over the debts, should do its best to ensure that the debts are settled, to avoid a cascading effect on the economy.
“Government should do everything to settle the debts so our economy does not get affected. The oil marketers also have to be encouraged, they are part of our society and economy” he added.
The lawmaker noted that while the committee cannot go beyond its mandate, which is to ensure oil marketers clear their debts to PPMC, the companies can petition or lobby relevant House committees to facilitate the payment of their subsidy claims.
Jarigbe however frowned at the practice where some of the oil marketers lift products from the PPMC under the 15 credit agreement, sell the products, and fail to pay for the products.
“Some do not honour the throughput agreements. The government stores products in their tank farms, they sell the products, and then refuse to pay. Some take loans at MPR rates, but fail to repay the loans,” he observed.
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