Nigeria’s economy may be grounded to a halt as Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) threatens to lay off 10,000 workers and shut out the Nigerian National Petroleum Corporation (NNPC) from its depots where the nation gets most of the premium motor spirit – petrol (PMS) supply for distribution to outlets across Nigeria.
DAPPMAN is demanding that the Federal Government pay an outstanding N800 billion meant for subsidy payment within 14 days, if not they would down tools.
If the NNPC fails to have access to the depots, this may result into acute shortage of petrol in the country, as majority of DAPPMAN members warehouse petrol in their depots on behalf of the NNPC under throughput arrangements.
Should this happen, it will have a multiplier effect on the nationwide supply and distribution of petroleum products, which presently is still a struggle.
Investigation indicates that of the 60 depots being operated by DAPPMAN members, 30 have already been shut down. 20 are currently under throughput arrangement while the remaining 10 are struggling to remain operational, and these are the ones that may be shut down if the threat is carried through.
Olufemi Adewale, executive secretary, DAPPMAN, said the association resolved to take this route because all previous appeals to government through series of letters to pay them the agreed money appear to have fallen on deaf ears.
Adewale said the interest on the loans from the banks kept mounting, adding that Asset Management Corporation of Nigeria (AMCON) was always on the neck of his member for repayment of loans.
The Association in a letter to Emmanuel Ibe Kachikwu, minister of state for petroleum resources, dated February 20, 2018, stated: “We are continually under pressure by, our banks/AMCON, with looming threats of imminent take-over of our petrol stations and Tank Farms and other creditor labour unions, NARTO/PTD to whom we are substantially indebted due to past freight services.
“In the light of the fore going, DAPPMAN members do not have any other option open to us to forestall increasing debt burdens of borrowing to pay staff than to immediately commence massive staff disengagement as earlier forewarned in our letter of 24th January, 2018, where we had, in the light of the above and after exhausting all formal avenues to secure payment of these debts, alerted the Federal Government, via a 21-day notice to the likelihood of disengaging personnel; a last resort to curtail spiralling borrowings and interests in the effort to meet salary obligations to underutilised personnel.”
The letter, DAPPMAN say, serves as a fresh 14-day reminder from the day it was written and an opportunity for the Federal Government and its agencies to speedily approve and pay off its remaining subsidy era indebtedness to all our members and indeed all petroleum marketing companies.
Federal Government however said the payment document was with the National Assembly for confirmation. This claim was denied by the chairman Senate committee on petroleum downstream, Kabir Marafa.
Marafa was quoted to have said that government was paying for subsidy that did not exist, adding that the Senate was not comfortable with the submission by NNPC GMD, that NNPC was being owed N1.7 billion subsidy.
Investigations show that NNPC has only few depots that are operational hence its reliance on oil marketers for storage of the products when they are imported into the country.
The NNPC also said that activities of pipeline vandals had complicated the free flow of petroleum products and crude supply in its pipeline system leading to a colossal cost of over N174.57 billion in product losses and repairs of products pipelines within the last 10 years.
According to the NNPC, a total of 16,083 pipeline breaks were recorded within the last 10 years adding that while 398 pipeline breaks representing 2.4 per cent were due to ruptures, the activities of unpatriotic vandals accounted for 15,685 breaks, which translates to about 97.5 percent of the total number of cases.
In all, 8,105 breaks were recorded along the system 2E within the period representing about 50.3 percent of the total number of petroleum products pipeline breaks in the country. The attacks left the NNPC with a cost of N78.15 billion in product losses and pipeline repairs.
