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Reps threaten to ban Conoil over N3.182bn debt to PPMC

…Demand 50% cut of its product access
By Emman Ovuakporie and Johnbosco Agbakwuru
ABUJA – THE House of Representatives Adhoc Committee ‎investigating alleged huge debt of over N500 billion and criminal act of sabotage by oil marketers in connivance with Petroleum Product Marketing Company, PPMC, yesterday threatened to bar Conoil Plc from lifting further products if it did not pay up its outstanding debt of N3.182billion owed to the PPMC.

Recall that the Speaker, Yakubu Dogara had set up the Ad-hoc Committee after a resolution on the motion sponsored by Jarigbe Agom Jarigbe, with the title, “Urgent need to investigate the huge debts owed to PPMC by major and independent oil marketers/sabotage by some oil marketers.

Jarigbe who represents Ogoja/Yala Federal Constituency of Cross River State in the motion alleged “that there was a connivance and compromise by functionaries of PPMC to leave government funds in the hands of these marketers, thereby putting the country in dire financial straits.”

The affected marketers involved in the alleged huge indebtedness to PPMC are, Oando, Forte Oil, NIPCO, Total Oil, Conoil, Mobil Oil, Masters Energy Oil and Gas Ltd, MRS Oil and Gas, Heyden Petroleum, Rahamaniyya Petroleum, Amicable Petroleum, Aiteo Petroleum, Honeywell Oil, Capital Oil, Felande Petroleum, Sharon Oil and Zamson Petroleum.

The Abdullahi Mahmud Gaya-led Chairman, had last week threatened to issue bench warrant on the Managing Directors of Oando, Masters Energy, Capital Oil and Conoil if they failed to appear before the committee this week to clarify their financial status with the PPMC.

At the public hearing yesterday, the Ad-hoc committee issued the threat following discovery that company had perpetually been in arrears in default of the 15-days allowable credit circle for so long without paying interest whilst continuing to lift products.

The Financial controller of Conoil plc, Abdulateef Ijaiya told the committee that the debt position of the company with government as at 31st December, 2016, was N3.3 billion out of which N2.5 billion was due to PPMC and which had been scaled down to N3.182billion.

He further said that the company was hoping that in the next one week, about 50 percent of the amount would have been settled giving the company’s payment system.

But the Committee Chairman who was also informed that the company had defaulted before and was made to pay penalty for defaulting stated that according to available records Conoil had been defaulting by virtue of continuous lifting of products which made the debt to rise to N3.3bn without paying anymore penalty.

Rep. Jarigbe Agom Jarigbe told the committee that Conoil has a revolving credit line of over N2 billion even though the threshold was N500million, while it has consistently defaulted and paid negligible amount from what’s been owed.

He described the development as “surreptitious” and “wrong”, adding that it has “been using funds belonging to Nigerians without paying interests and penalties for defaulting.”

The Financial Controller disclosed that the company was in arrears of about two to three months and would make effort to clear at least 50 percent of the total debt in the next week.

But the committee frowned at that, saying that it expected it to clear its debt before engaging in any further lifting of products, alleging that not only was the company “using public funds to do business, it’s also diverting public funds to other businesses.”

The committee therefore ruled that while the company paid the 50 percent it had pledged, the PPMC would be directed to cut down product allocation to it by the same token of 50 percent after submitting a written commitment that it would clear the balance of 50 percent before it can return back to status quo of lifting 100 percent.

For OVH Oil and Gas plc that was allegedly owing N7.5 billion‎, its Chief Executive Officer, Ola Mosun Williams, said the debt burden of her company was made difficult to clear due to debt owed it by PPPRA as a result of which the company was cut off for 6 months, forcing it to fight the urge of laying off staff.

She said the company had to reach an agreement with the PPMC regarding a monthly payment schedule of N632 million spanned across six months which was being handled on a weekly basis to demonstrate seriousness.

She informed that “as for current product lifting, the company is not in any arrears.”

However, the committee chairman noted that while OVH claimed debt of N4.5 billion, the PPMC submitted documents suggesting that it owed about N6.4 billion as at December, 2016.

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