Group Chief Executive Officer (GCEO) of Forte Oil Nigeria, Akin Akinfemiwa, has disclosed that the Federal Government is owing oil marketers over N300 billion under the subsidy regime between 2014 and 2015.
Akinfemiwa who spoke at the hearing of the Abdullahi Mahmud Gaya-led House of Representatives ad-hoc committee investigating money owed the Petroleum Pipelines Marketing Company (PPMC) by marketers, stated that Forte Oil is being owed N13.8 billion, while his company in turn owes PPMC N5.9 billion for the oil it lifted.
The GCEO, however, stated that government had shown commitment to offsetting the debts, saying, “from our records, as at January 31, our indebtedness was to the tune of N5.995 billion. But we’re being owed N13.8 billion from subsidy. This is part of the over N300 billion the government is owing different oil companies.
“So far, the government, led by the Chief of Staff to the President invited us to a meeting with other stakeholders to address two issues. One was to continue petrol supply and two was for Federal Government to pay its debts.
“Under the debts, a committee was set up to settle them. The total stands at over N300 billion. Right now, we can’t even do much but we don’t want a situation where there’ll be queues in the country.
“If you look a the N13.8 billion, we’re the ones being owed about N8 billion. We have also written to the Senate in recent times where we asked them to assist us with the payments of subsidy. The banks are not even lending as at now. We even paid about N5 billion as at the end of December,” Akinfemiwa said.
The committee was, however, keen on plans by Forte Oil to pay the N5.9 billion it owes government according to the mandate given it by the House to recover the huge debts oil markers owe the country, with members taking turns to question the company’s representative.
Bode Ayorinde demanded an explanation from Akinfemiwa saying, “from this paper, you’re owing N5.955 billion. Did your agreement give room for debts? What’s the circle of the debts? What is the security for the debts?
What is the interest agreed to be paid on outstanding debts? Do you sell on credits to those who buy from you?”
This is as another member of the committee, Henry Nwawuba, asked: “Can we have the details of your credit dealers, just to verify your claim? Do you have bank loans taken to assist you do retail business?”
In his response, Akinfemiwa said the agreement entered into was for debts on oil lifting to be paid in 15 days, saying, “even if you lift N500 billion worth of oil, you need to pay within 15 days. Ideally, we should have reviewed the agreement terms after the fuel price increase from N87.5 to N145.”
Explaining the security of the debts, he said most of the affected companies aren’t new to government, adding “so most of the time, the security is the company, which is like the company’s guarantee. On selling, we sell both on credit and sometimes not.
“We have about 500 retail outlets spread across Nigeria. We have that capacity. We are being hampered by cash flow. We have about 12-13 per cent market share in the industry,” he said and promised to send the details of the company’s dealers to the committee.
“With respect to N5.9 billion, I think the executive arm’s committee finishes its work in the next two and half weeks before we can talk about paying. We’ll continue to pay what we can till we’re able to liquidate the debts,” he said.
Regardless, the committee directed that Forte Oil must pay 50 per cent of the N5.9 billion debt it owes, failing which the lawmakers resolved to direct PPMC to stop fuel supply to the company.
Source – The Sun