The House of Representatives Adhoc Committee investigating alleged Huge Debt of over N500 billion and criminal act of sabotage by oil marketers in connivance with Petroleum Product Marketing Company (PPMC) has directed PPMC to henceforth cut supply of product to Con Oil Plc by 50% pending when its would pay up its outstanding debt of N3.182billion.
The Rep. Abdullahi Mahmoud Gaya-led. Ad-hoc committee issued the directive following discovery that Con Oil has perpetually been in arrears in default of the 15-days allowable credit circle for so long without paying interest whilst continuing to lift products.
Financial controller of Con Oil plc, Abdulateef Ijaiya had told the committee that the debt position of the company with government as at December, 31st was 3.3billion out of which N2.5billion is due to PPMC and which has been scaled down to 3.182billion, saying that the company is hoping that in the next one week, about 50 percent of the amount would have been settled giving the company's payment system.
Asked if there was anytime they paid penalty based on default, Mr. Ijaiya said yes.
The committee chairman noted that according to records available to the panel, Con Oil has been defaulting by virtue of continuous lifting of products which made the debt to rise to 3.3bn without paying anymore penalty.
He said the coy will continue to take products from the PPMC.
A committee member, Rep. Bode Ayorinde (PDP, Ondo) told Con Oil that the committee would have appreciated tabulation of the value of products lifted and the debt schedule as well as when it would be paid.
Also reacting, Rep. Jarigbe Agom Jarigbe who moved the motion necessitating the probe told the committee that Con Oil has a revolving credit line of over N2billion even though the threshold is N500million, while it has consistently defaulted and paid negligible amount from what's been owed.
The Member further described the development as "surreptitious" and "wrong", adding that it has "been using funds belonging to Nigerians without paying interests and penalties for defaulting".
At this point, the committee said, not only did Con Oil over-shoot it's credit line threshold of N500million, it has also consistently disobeyed the 15-day credit limit for years.
The Financial Controller at this juncture alluded to the fact that the company is in arrears of about 2 to 3 months and would make effort to clear at least 50 percent of the total debt in the next week.
This, the committee picked holes in, saying that it expects Con Oil to clear off its debt before engaging in any further lifting of products, alleging that not only is the company "using public funds to do business, it's also diverting public funds to other businesses".
The committee therefore ruled that while the company pays the 50 percent is has pledged, the PPMC would be directed to cut down product allocation to it by the same token of 50 percent after submitting a written commitment that it would clear the balance of 50 percent before it can return back to status quo of lifting 100 percent.
For OVH Oil and Gas plc which is owing N7.5billion, it's chief executive officer, Ola Mosun Williams, said the debt burden of her company was made difficult to clear due to debt owed it by PPPRA as a result of which the company was cut off for 6 months, forcing it to fight the urge of laying off staff.
She said the company had to reach an agreement with the PPMC regarding a monthly payment schedule of N632million spanned across six months which is being handled on a weekly basis to demonstrate seriousness.
She explained that "as for current product lifting, the company is not in any arrears".
Nonetheless, the committee chairman noted that while OVH claimed debt of N4.5billion, the PPMC has submitted documents suggesting that it owes about 6.4billion as at December, 2016.
The committee therefore told OVH that interest of N2.7billion has been charged into its account as against initial position by the company that the PPMC has never charged any interest on defaulted payments.
For the MD of Sharon Oil and Gas, Solomon Ezogie , the committee asked him to take a bow and go for not owing the government any amount.
However, the MD of Iteo Oil and Gas, Mr. Ewariezi Useh told the committee that the PPPRA is owing the company the sum of 804 million which has made it impossible for them to meet their obligation.
On conclusion, the chairman assured that if the committee verifies it's claim and authenticates documents presented, it would impress it on the PPMC to give oil equivalent of the said amount to the company without further delay.
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