DMO Invites Oil Marketers over Subsidy Arrears
The Debt Management Office (DMO) and major oil marketers are to meet this week over subsidy arrears, THISDAY has learnt.
The meeting, which is at the instance of the DMO, is designed to provide an opportunity for the debt management agency to explain the process for the issuance of promissory notes to settle outstanding arrears due to the marketers as well as provide a ‘Status Report.’
The Senate Committee on Petroleum (Downstream) had in its October 31, 2018 resolution directed the Ministry of Finance and the Debt Management Office (DMO) to meet with oil marketers and other stakeholders on grey areas and report back within one week.
The DMO, in a statement yesterday said it had invited the marketers for a meeting this week on the arrears.
The agency recalled that the Federal Executive Council (FEC) approved the establishment of the Promissory Note Programme and Bond Issuance to settle inherited local debts and contractual obligations due to various categories of creditors, including oil marketers in July 2017.
“These were unpaid obligations carried over from previous administrations. The amounts presented to FEC and subsequently to the National Assembly, were derived by simply collating figures from various MDAs (Ministries, Departments and Agencies) in order to kick-start the process.
“Given that these were largely unverified amounts, it became prudent on the part of government to include processes that would be adopted in the implementation of the programme that would ensure transparency and value for money before the Promissory Notes are issued.
“One of such processes is the validation of the amounts against each creditor by an international accounting firm operating in Nigeria,” the DMO said.
The agency added that based on the approval by FEC, the DMO initiated steps towards the implementation of the programme, one of which is the appointment of advisers using the provisions of the Public Procurement Act, 2007.
“However, since the programme involves the issuance of sovereign debt instruments, which require the approval of the National Assembly, as provided in the Fiscal Responsibility Act, 2007, there was a limit to what the DMO could do without the lawmakers’ approval.
“It is on record that the required NASS approval was only received on September 26, 2018 through a letter from the Clerk of the National Assembly.
“With the approval of the National Assembly now in place, the DMO has accelerated implementation of the Programme, which it will implement in accordance with the process approved by FEC,” the DMO stressed.
According to the DMO, the claims by oil marketers are for accrued interest and foreign exchange differentials, adding that while some of the issues involved in the implementation of the Promissory Note Programme have been explained to representatives of the oil marketers, it has invited the oil marketers to a meeting this week “to explain the process to them and provide a Status Report.