imageEmbattled Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, has stated that contrary to popular opinion and belief, the contentious backlog of subsidy payment that has continued to dominate the political space was inherited by the administration of President Goodluck Jonathan.

Mrs. Alison-Madueke admitted that the backlog dates back to over 40 years and wondered why oil marketers would expect the outgoing government to reduce the debt to zero. She said such expectations are cynical and unrealistic.

We are faced with a situation where the marketers want this administration to pay them all the money they were being owed before the tenure runs out on May 29,” she said, but added that “this is a difficult situation more peculiarly because this administration did not incur all the debt, which actually goes back 40 years.

“It is a rolling obligation. There has never been a time when the debt obligations were reduced to zero; it is cyclical. What the marketers are asking for is not just the outstanding amount to be paid but also for the exchange rate differential they have incurred. This is in the light of the many conversations that are ongoing about deregulating the subsidy payments.

“The transition period was allowing the marketers to try to forestall any losses as a result of a change in regime. While this makes good business sense, it is the polity that suffers. The Ministry of Finance and the Presidency are giving this situation the priority it deserves,” Mrs. Alison-Madueke argued further.

She blamed her woes on oil cabal members who are bent on frustrating some of the modest reforms achieved in the petroleum sector. Alison-Madueke said such embittered cabal members were behind her travails.

The outgoing Petroleum Minister equally explained the argument behind the recent nationwide strike by oil workers, which crippled the entire country and almost brought the country to a halt.

Her words: “The strike was about two things. First, the union workers were demanding for salary increases at a time when NNPC’s running cost is already extremely high. How are we going to increase salaries when we are currently looking at ways to curb expenses and more especially keep things in a consistent and clear state for the new regime.”

“Secondly, the strike by the NUPENG arm of NPDC has come about following the decision to move NPDC from a sole operator model to a joint operatorship model for some of its assets. This was done to increase the production volumes from those assets, which had remained consistently low for some time. The reason production has been low was due to the sheer cost that NPDC has had to bear in operating the assets.

“These joint venture partners that have been brought in to alleviate the cost pressure are operating under extremely stringent terms to ensure that the ownership of the assets remain with the government. The companies have also had to take out huge loans with moratoriums of up to 10 years in order to perform their activities to successfully meet the production volume expectations. So in many ways, this situation can be regarded as a win-win for the government, NPDC and the JV operators, which would begin to yield great benefits for the generality of Nigerians, as the boost in volumes would inevitably lead to a boost in the nation’s revenue from the sector.”

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