A 14-day ultimatum has been issued by the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) for the payment of N650 billion debt owed its members, failing which they will shut all fuel depots.
In a February 20 letter to the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu, the association said the decision was taken because members could no longer continue operations due to debt owed them by the federal government.
“In the light of the foregoing, DAPPMAN members do not have any other option open to us to forestall increasing debt burden of borrowing to pay staff than (but) to immediately commence massive staff disengagement,” the association’s letter signed by Olufemi Adewoleb, its executive secretary, stated.
“The unfortunate primary fallout of this step is the likely shutdown of all DAPPMAN depots nationwide due to lack of man power to operate same pending the time the federal government will pay off its indebtedness to petroleum marketers.
“This unfortunately will have a multiplier effect on the nationwide supply and distribution of petroleum products which presently is a struggle.
“This letter serves as a fresh 14-day reminder from today and an opportunity for the Federal Government tiers and its agencies to speedily approve and pay off its remaining subsidy indebtedness to all our members and indeed all petroleum marketing companies.”
In an initial letter sent to President Muhammadu Buhari, DAPPMAN said members could no longer access bank funds for their operations and gave a 21-day notice beginning January 24 before it would lay off workers.
The group also lamented that banks, in conjunction with the Assets Management Corporation of Nigeria (AMCON), are in the process of auctioning the properties provided by its members as collateral for loans.
“These debts came about as a result of the foreign exchange differentials which arose as a result of the initial devaluation of the naira (by the last administration) from the initial N165/$; the interest component that arose due to delayed reimbursement also by the same administration which the federal government had approved for payment to marketers but which was not fully settled by the appropriate federal government agencies.
“The second forex differential component and obviously the largest chunk is due to the last but further devaluation of the naira from N195 to N305 to $1, while the federal government agencies had based their reimbursement calculation on N197/$; this devaluation left petroleum marketers within our association with additional unplanned debt burden in excess of N300 billon.
“As a result of the above, the downstream sector as a whole, has been saddled with a debt burden of over N650 billion which keeps rising alongside the previous debts because the banks keep charging interests and will continue to do so until the total debt is fully liquidated,” the marketers stated.