Oil Marketers Holding Nation to Ransom – Okonjo Iweala

Okonjo-Iweala, managing director of the World Bank, attends a session at the WEF in the Swiss Alpine resort town of Davos

The federal government appears fed up with the claims of oil marketers as it has denied owning the group N200 billion.

Coordinating Minister for the Economy and Minister of finance, Dr. Ngozi Okonjo- Iweala who disputed the debt figure said what the oil marketers are owed is about N131 billion based on Petroleum Pricing Products Regulatory Agency’s (PPRA) template.

The minister attributed the current fuel scarcity to the activities of a group of cartel determined to hold nation to ransom. She expressed surprise at the attitude of the marketers saying that “they were more liberal in times past even when their outstanding was in the region of N2.3 trillion.”

According to Okonjo-Iweala, “it has become a situation where we have a cartel that can ground the nation to a halt at will.

” I strongly suggest that the nation has to do something about it. It has been very stressful for four years, trying to cope with a group that controls a very important sector of a nation and they are small enough to organize themselves.”

This she said “means that they can hold a nation to ransom anytime they want. And that is what is happening.”

” I remember when I came back as finance minister on August 17th 2011, the first thing that confronted me was this scandal of subsidies. By then more that N 1 trillion had already been paid. And we went through that whole thing and since then we cleaned up, restructured and trimmed down.

“You see that the amount we have been paying year by year diminished substantially to about N971 billion a year down from the N 2.3 trillion of 2011. We brought it from N 2.3 trillion to about N 971 trillion that has been in the budget each year. So, we made very substantial restructuring and changes to the whole process that brought the amount down for the nation. But yet we have to deal with this problem and the whole country has seen us trying our best struggling,” she said.

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Okonjo-Iweala noted that oil marketers are a small cartel that are into no risk business based on template negotiated with PPPRA a long time ago which factored in exchange rate differential and profit margin guarantee.

According to the finance minister, “the template that governs their business is designed to cover all their costs plus a profit margin. That is PPPRA template which I have quarrelled with for quite some. So it is really no risk business for them. Or very little risk. I am not saying there is no stress. Of course, they have stress. But the risks are all covered by the template that was negotiated with PPPRA long ago. And it is actually that template that we have been quarreling with”.

That template she added “says that they must be paid exchange rate differentials, interest rates, profit margin quarrantee plus the principal amount they spent in the business.

” Based on that, the government is taking a full risk of their business according to this template. Even when we have revenue shortfall, any interest that accrues has to be paid by government. That is what was negotiated. So, they are in a no risk business and we have been pleading with them that if that is the case at least supply Nigerians with the fuel because at the end of the day the government is still paying for all of this. Why are you making Nigerians suffer? Why these long queues?”, she queried.

On Thursday last week, Federal Ministry of finance confirmed payment of N156 billion to oil marketers and put the balance left at N98 billion. The minister explained on Sunday that the balance has increased to N131 billion based on last figure obtained from PPPRA.

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