– The petroleum downstream sector seems set for another crisis
– This is because key unions are threatening to go on an indefinite nationwide strike
– The unions are furious over the federal government’s inability to settle debts of over N800 billion owed oil marketers
A report by The Nation indicates that the Petroleum and Natural Gas Workers Senior Staff Association (PENGASAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) will soon embark on a strike.
According to the report, both unions have served notice of a nationwide indefinite strike over the federal government’s inability to settle debts of over N800 billion owed oil marketers.
The marketers are Major Oil Marketers Association of Nigeria (MOMAN), Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs).
ZENITHBLOG.com gathered that the notice of the indefinite strike has been received by the marketers, who are the employers of the unions’ members.
The teething problems in Nigeria’s oil industry continues even with President Muhammadu Buhari personally presiding over the sector. Source: Twitter
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The unions position was made known in a communique issued after a meeting held on Tuesday, October 3.
Part of the communique read: “Our members working with oil companies have not been paid salaries for up to nine months by marketers due to inability of the government to redeem its commitment to pay in spite of the intervention of the Vice-President, Professor Yemi Osinbajo, and the directive given to the minister of finance to effect payment on or before the end of July 2017.”
It further stated that the unions “have been inundated by officials of our various labour units operating in tank farms and depots across the country that most petroleum product importers and marketing companies are owing their members backlog of salaries now up to nine months.
“The most disturbing aspect of this is that many members are now redundant as their employers are not able to operate their bank account for their operations with a potential massive job losses of our members in the oil and gas sector and other workers in the banking sector due to the growing size of this non-performing loans extended to oil marketers with a catastrophic banking system collapse looming in the country.
“This will definitely puncture any growth gains made in the economy so far, considering that the sector will completely fail in its critical role of driving economic progress, resulting in huge job losses directly and indirectly.
“It is factual that currently many of the oil marketing companies are owing backlog of salaries up to nine months in arrears while some marketers have started retrenchment of workers as a result.”
NUPENG and PENGASAN also claimed that the children of their members had been sent away from school because their parents were unable to pay their fees.
They also claimed that most of the marketers were planning another round of massive retrenchment of PENGASSAN AND NUPENG members.
“The businesses of these marketers are gradually grinding to a halt due to the debts owed them by the federal government and the classification of their operating accounts by the banks crippling the ability of the marketers to trade since the first quarter of the year.
“Most banks are planning to take over our tank farms and business empires due to inability to pay back money borrowed to import products that were still pending unpaid by government.
“There is a need for President Muhammadu Buhari’s government to keep improving governance, especially by correcting wrongs of previous governments and making government responsible to its contracts and responsibilities.
“For the banks, their action is to see how they can avert another round of banking system failure that could be triggered by this huge outstanding non-performing debts owed the banks by oil marketers who cannot pay because the government is yet to pay them outstanding indebtedness,” the marketers said.
The marketers said that the first source of the N800 billion debt was the non-payment of the balance of over N300 billion under-recoveries under the importation template owed the marketers since 2015 and was provided for in the 2015 supplementary budget as well as the 2016 budgets.
According to them, they learnt that only about 20 per cent of the amount provided for in the budget was actually paid in August 2016 with a promise to pay the balance within three months.
They went on to say that the second source of the debt arose because of the failure of the government and the Central Bank of Nigeria (CBN) to provide foreign exchange to banks that financed the importation of premium motor spirit (PMS) in 2015.
The communique also detailed how the banks used their dollar confirmation credit lines with foreign banks to open the Letters of Credit at exchange rates between N168/$ to N198/$, adding that when the Letters of Credit became due, the banks defaulted because the CBN did not provide the dollars.
“The effect of this is that every day total interest payable is over N635million, translating to over N19 billion in monthly interest or over N232 billion annually,” the communique said.
The queues may soon be back on Nigerian roads
They opined that the increasing debt is a creation of the agencies of government and it will continue to eat up the stability of the country’s financial system if it is not resolved immediately.
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Meanwhile, Bring Back our Girls co-founder, Aisha Yesufu, has given her opinion on the issues raised by the minister of state of petroleum, Dr Ibe Kachikwu, in a leaked memo to President Muhammadu Buhari.
Yesufu, a social activist and public commentator, took to her Twitter page on Wednesday, October 4, to criticize President Muhammadu Buhari, with the way the minister was treated.
She opined that the president was not interested in seeing the minister in response to claims by Dr Kachikwu that he has not been able to gain access to Buhari.
Are Nigerians truly tired of President Buhari? – on ZENITHBLOG.com TV
Source: Zenithblog.com
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