N800bn debts: PENGASSAN, NUPENG threaten strike

……Banks worried over marketers’ huge loans
Total collapse of the petroleum downstream sector may be imminent, as both the Petroleum and Natural Gas Workers Senior Staff Association (PENGASAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG) have concluded arrangements to embark on indefinite strike action due to the backlog of salaries owed their members by oil marketers.

The threat to go on industrial action by the unions is coming on the heels of the inability of Federal Government to settle the lingering accumulated debts of over N800 billion owed downstream oil marketers to date.

The unions said that the strike action has become absolutely necessary following the continuous deteriorating welfare of its members working in petroleum downstream sector.

According to them, “Our members working with oil companies had not been paid salaries for up to nine months by marketers, due to inability of the government to redeemed its commitment to pay in spite of the intervention of the Vice President, Professor Yemi Osinbajo; and the directive given to the Minister of Finance to effect payment on or before the end of July 2017.

The notice of the indefinite strike action by the labour unions in the oil and gas sector has been received by the Marketers who are the employers.

This is contained in a joint communiqué issued by the marketers after their joint National Executive Council (NEC) meeting held in Lagos, signed by the marketers’ legal adviser, Patrick Etim Esq; and made available to journalists.

The marketers are under the aegis of Major Oil Marketers Association of Nigeria (MOMAN) Independent Petroleum Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and Independent Petroleum Products Importers (IPPIs)
Etim said that the unions,

in their summation, stated that in the last six months, they have been in undated by officials of our various labour units operating in Tank Farms and Depots across the country that most Petroleum Product Importers and marketing companies are owing our members backlog of salaries now up to nine months.

The unions claimed that the children of their members have been sent packing from schools, as their parents have not received salaries to be in a position to pay school fees for their wards, while their members are systematically being sacked by their employers.

According to the unions, the most disturbing aspect of this is that many members are now redundant, as their employers are not able to operate their bank account for their operations with a potential massive job losses of members in the oil and gas sector

and other workers in the banking sector due to the growing size of this non-performing loan extended to oil marketers with a catastrophic banking system collapse looming in the country.

He said that it is factual that currently many of the oil marketing companies are owing backlog of salaries up to 9-months in arrears while some marketers have started retrenchment of workers as a result.

He noted that the businesses of these marketers are gradually grinding to a halt due to the debts owed them by the federal government and the classification of their operating accounts by the banks crippling the ability of the marketers to trade since the first quarter of the year.

According to marketers, most banks are planning to “take over our tank farms and business empires due to inability to pay back money borrowed to import products that were still pending unpaid by government.”

The marketers said that petroleum marketers, as a result of these unpaid interest and foreign exchange differentials have gradually become insolvent and financially handicapped to continue operating profitably.

“There is a need for President Muhammadu Buhari’s government to keep improving governance, especially by correcting wrongs of previous governments and making government responsible to its contracts and responsibilities.

For the banks, their action is to see how they can avert another round of banking system failure that could be triggered by this huge outstanding non-performing debt owed the banks by oil marketers who cannot pay because the government is yet to pay them outstanding indebtedness.”