The House of Representatives Adhoc Committee investigating alleged over N500 billion and criminal act of sabotage by oil marketers in connivance with Petroleum Product Marketing Company (PPMC) on Thursday threatened to arrest managing directors of major marketers of petroleum products if they fail to appear before the Committee next week Monday, 26th February 2017.
They are as follows: Oando Oil Plc, Capital Oil Plc, Master Energy and Conoil plc.
They are summoned by the committee to explain their inability to pay up debts owed to the PPMC arising from lifting of petroleum products from government facilities around the country.
The chairman of the ad-hoc committee, Rep. Abdullahi Mahmoud Gaya in his opening remarks expressed disappointment at the non-compliance to rules by operators in the sector.
"We believe that doing business in the oil and gas sector is restricted to noble people, people who have seen it all as far as busines risks and gains are concerned. We also believe the saying that, to whom much is given, much is required.
"Of a truth, it's people in big businesses who may owe more, but by reason of the throughput agreement, I still don't know how the indebtedness emanated from", he said.
According to representatives of the major oil marketers, Federal Government is owing over N300 billion in subsidy debt, coupled with exchange rate differentials which have made it difficult for them to meet their obligations to the PPMC.
Speaking earlier, Mr. Akin Akinfeminwa, Group CEO of Forte Oil Plc which owed over N15billion told the committee that his company failed in its bid to meet its obligation due to unpaid subsidy claims to its firm by the federal government.
"If you look at the subsidy owed from 2011 to 2013, it's more than what we even owe the Petroleum Subsidy Fund (PSF), the government team led by the Chief of Staff to the President (Aba Kyari) called us to a meeting two days ago to beg us not to interrupt the supply of petroleum products.
"One of the things that - that committee is working on is to see if there can be a let-off of the debts because with it, we can't really do anything with regard to sustained importation of oil. And as it is, we are the ones who are actually owed in excess of N8billion naira today. These are claims that have been verified, the cargoes are identified and approved", Akinfemiwa submitted.
Asked how much has Forte Oil paid out of its debt so far, he said N10.5billion and the balance is the 5.955bn in January, 2017.
Also asked if the agreement gave room for debt and if yes, what is the cycle of payment as well as items used as security?
The committee also asked whether he sells on credit to consumer thereby necessitating the accumulated debts,
He responded saying that they had a 15-day credit which was not reviewed over time.
He explained that there have been a constant increase in dollar exchange rate for over three years which has not been taken into cognisance by the National Monetary Policy Committee (NMPC) when recording import claims and debt liabilities.
He informed the panel that security for the debt is actually the company's, saying that the NMPC can decide what is paid, stressing that "not all the debts are paid within 15 days due to cash flow constraints".
He said while they sell to dealers who pay cash and carry, they also supply dealers who take products on credit, adding that it was all in a bid to ensure that fuel flows at the fuel station, as the NNPC has made it a policy to prevail on marketers to keep the product coming no matter what.
Asked if he was looking for cheap funds by asking government to let off debt to enable them concentrate more on debts owed banks, he said even Forte Oil is been owed by the NNPC and that's a factor militating against his ability to meet its own obligations to government.
The committee therefore demanded for receipts proving claims that he has made payments as at when due, leaving the remaining N5.955 billion, as well as how much supply done and government debts to his company.
It also threatened to direct the Management of PPMC not to continue giving products to Forte Oil when it has not paid for previous supplies.
On the other had, the over N5billion owed it by the NNPC, Mobil Oil represented by its Managing Director, Ini Ufot gave a commitment to the committee that it's making effort to pay it's outstanding debts of 1.5bn between Thursday and Friday.
He said there's a limit of N500million 15day credit facility from the NNPC which was not reviewed following the rise of dollar exchange rate.
He corroborated the position of Forte Oil that the NMPC was approached regarding the need for a review but declined ability to do so as a committee, leaving the task on the head of Pump Price Review Committee of the NNPC.
He said the development forced the company to exceed the 15 day limit of the N500million facility which necessitated the accumulation of debts to 1.5billion which he promised the company would pay by 24 February, 2017.
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