Ifeanyi Ubah Calls For Deregulation In The Nigerian Oil Sector

By KayCee June 8, 2015 22:13

The Managing Director of Capital Oil and Gas, Ifeanyi Ubah has been one of the vocal personalities calling for the deregulation of the Nigerian oil industry. Last week Thursday, while appearing on a television show, Ubah reiterated his call. The interview was monitored by The Sun newspaper. Read below:

What informed the decision of Capital Oil and Gas to break out of a collective decision of marketers to punish Nigerians (at least that is how Nigerians see it) for no just cause?

You know when they said the col­lective decision of marketers, I coun­tered that because there was no formal meeting; there was no memo; there was no agenda. So, if anybody is say­ing formal arrangement of marketers, I counter that. When I went to Chan­nels two days ago, they asked me the same question if there’s a clique and I said no. It is assumed that there’s a clique among the marketers that did this to Nigerians because, as an as­sociation, we have no right to go on strike. We are not labour union. As an association, if we were going to take such decision, we would liaise with labour union who owns our workers and there are parameters we should take in going to strike. Like I said ear­lier on, we only received a text mes­sage on Saturday telling us that on Monday there should be strike with­out anybody owning to that text.

You got a text?

Yes, just a text.


Somebody sent it to me. It should be somebody from the union that there was not going to be business on Monday.

Which of the union because there are so many unions in the sector?

Maybe one of the unions in the companies. Every company has a union. So, we got a text from some­body from the union which was for­warded to us, but that text did not indicate that it is coming from either NUPENG or PTD. So on Monday because of the traffic clearing of Apa­pa-Oshodi Expressway , Lagos State government gave us ultimatum that all trucks and tankers (trailers) must vacate within 24 hours, so we thought it was the same process of trying to clear the market. And we waited Monday, Tuesday, Wednesday and at a point I asked myself what are we into? I started asking questions who ordered this strike? You see Nigeria is a country that forgets easily. We need to know who ordered this strike. Is it NUPENG? If it was NUPENG, NU­PENG needs to tell Nigerians why it ordered the strike? But I have asked him (NUPENG President) but he said no. That if he ordered the strike, he would make pre-warning strike. He would tell Nigerians that we were em­barking on strike.

He would probably give reasons for the strike?

Yes, he would give reasons for the strike. Also top executive from PTD, Mr. Korodu went to Channels TV on Monday and said they were not on strike but simply that the depots were not ready to load.

Mr. Korodu leads Petroleum Tankers Drivers union of Lagos?

Yes. So if it is not coming from Korodu and is not coming from NU­PENG President, then who ordered the strike?

But you have other associa­tions….?

We have DAPMAN. TEFON, MOMAN, so many associations in the industry.

Are you aware that members at any time came together and said they would stop distribution of products and others?


Are you aware that oil marketers had to leverage its foot with govern­ment over payment of subsidy?

We are all owed. And I am sure Capital Oil and Gas must even be among the highest in terms of people being owed in that regime. My law­yer, Wole Olanipekun, wrote to even Minister of Finance, urging her to pay our bills last week. There’s a process we should follow about asking for our money and not just to cage govern­ment. You first table it to workers and say I am going to off load my work­ers, I am not going to pay salaries. Then the labour union will now write to Secretary to the Government, SSS, Police and then copy us. Then if they don’t come to tell government this is what is about to happen that we are about to lay off our workers because we are not making it, they can com­mence strike. Not us commencing strike. It means that marketers have now formed association of labour.

There are reports (I like you to confirm it if you are aware) that this strike was actually called by a few marketers, say four or five of them?

I discovered that yesterday.

Okay you are aware?

I discovered that about three or four people had caused this for the entire nation.

Have you tried to find out what their grouse or grouses are?

It could be they have skeleton in their cupboard and want to collect their money. That is it. Let me say something. When I took this decision I took it on a personal ground because Nigerians were suffering. The union did not consult me. So I don’t know anything about it. In the past, they sent circulars. Now I did even go into the union, I have never mentioned them because even if I had understood what has happened, I think there’s an inter­nal mechanism for me to tell them not to do this again? But then on Monday, I saw somebody from PTD on televi­sion trying to say I did it because of political reason. Then I made a call to Channels that I would be coming the next day to counter it because if I don’t, it will be assumed that was true. So, I went to Channels on Tuesday. I never mentioned marketers, I never mentioned DAPMA, to be frank. But yesterday I saw an online message purportedly coming from DAPMA Executive Secretary that I am not owed by government , that was why I backed out. Even if I am not owed by government would that make you people to go on strike?

Are you owed by government?

I am owed by government more than any other member. Then I sent a letter to him to list all the mem­bers that are being owed by govern­ment and how much. Then I can tell him how much government is ow­ing me. At the same time I have also asked him and also I sent message to him and some members telling them about what the guy did and giving them three hours to send apology let­ter which they failed. They have been sponsoring a lot of negative things against me online. Some said Ifeanyi Ubah is a liar; some said am not owed. So if an association that I belong to, and one of the founding members, one of the biggest investors in that as­sociation, can now say government is not owing me, they have to tell how they got to know that government is not owing me. This morning, I have asked my lawyers to put N20 billion libel against them if they don’t explain it. So that it will serve as a deterrent to those who are using the association to smear my personality. It is about Nigeria. Nigerians need to know who ordered this strike. If it is only four people I think it amounts to civilian coup plot. And you know what, they did it to cage the president and also to disrupt the incoming president and put government in a corner and force government to pay the money. And we need to event look at the money.

That’s a very critical point you have raised-the need to query the figures. Correct me if am wrong, part of the fact gathered is that Capital Oil, your company, alone is responsible for up to 30 per cent of petroleum needs of Nigeria. Is that correct?

About 35 per cent, we have capac­ity to dispense about 35 percent of Nigeria’s needs. When we started on Sunday, I am sure by Wednesday, we would have circulated products to Nigeria. And knowing very well that they are going to lose their face they hurriedly went to Senate and said they are resuming. So are they now the la­bour union because I didn’t even see the labour union in that Senate meet­ing. So who called for this strike?

So Capital Oil is a major player in this sector?

Yes, sir.

That means you are in the tick of all of this?

Yes, sir.

You have already said that gov­ernment is owing you but govern­ment has come out to say it is not owing the marketers? That it has paid all that it ought to pay for the first quarter of the year. How come you are insisting that government is still owing you?

Government is owing and govern­ment is not denying that it is not ow­ing.

The minister of finance said that they are not owing that what you are asking for is the differential be­tween exchange rates?

It is part of the process-both differ­ential and the debt. For me the minis­ter cannot say that.

But she said that?

I challenge her to come and say that about me. I challenge the Minister of Finance or any of the marketers to say I am not owed. But what she is saying is that you don’t have to say govern­ment should pay you N200 billion, not that they are not owing. But also one of the reasons why I am surprised about this action by our members is because there’s what we call sovereign debt guarantee issued by government before any allocation will be given to you. So you are covered under that guarantee. It is like government bond. So why are you worried? If they pay you your money after one year they would still pay you your interest and the differentials. For instance if you imported product three years ago and supplied to government under subsidy regime at N157 per dollar and today you are to repatriate the money to your supplier and the government will still pay you at the same rate? You have to cushion between N157 and N197, the interbank rate now. So that is what is called differential. Then interest charge. Government committed itself that it will pay the interest charge be­cause that sovereign debt guarantee says government will pay marketers 30 days after verification. So there’s no father Christmas in business.

Is that not bad business on the part of government although it may be good business on your part be­cause any time government doesn’t pay in good time you are sure it will pay with interest?

It is on both sides. That is why we are calling for deregulation. It is bad business on government because if you have incurred debt of say N100billion last year. Today they are going to pay you N120 billion. It is even more than the bond government sells because you see people take bond for 4 per cent or 3 per cent. But when you collect products from marketers for you to redeem in 30days and re­deem that payment after one year you are bound to pay it because the banks must collect their money.

Give us an idea as to how much government is owing Capital Oil and Gas?

Well, it is ranging above 18billion. It is about between 9, 10, 11billion but with interest it becomes higher because every day you compute the interest which makes it get to N18bil­lion.

Can you be above the largest owed?

I don’t know anybody’s own. That’s why I asked DAPMA execu­tive Secretary hence he knows that government is not owing me to give the list of those that are being owed.

Because there’s also the insinu­ation that if you are owed by gov­ernment and you have said you are being owed now and all of you probably collectively said this gov­ernment is owing us, it is going to leave office in few days time, if you don’t do something drastic that the incoming government has already by body language indicated that it may not be business as usual, we are losing, let’s go on strike and you break out the rank. A lot of people are saying that there must be a reason for it that probably you are trying to hammer out a soft landing for yourself with the incoming gov­ernment?

Well, almost everybody has been asking this question. First, I should be the one instigating the strike because I am being owed a lot of money. If I had any skeleton in my cupboard I would have (been) worried that the money must be paid. But there’s a sovereign debt guarantee and the whole transac­tion is transparent. So, there’s sover­eign guarantee and they will pay me my interest. The only problem is that the banks might be a bit (unwilling). Today you go to this bank. Tomorrow you go to that bank. Next tomorrow they might say no. That our window of exposure has blocked or closed you may need to go to another bank. This is the only problem. The banks as a body have not really said they are not going to finance petroleum prod­ucts. It is just a mere imagination of marketers every time they want to box government into a corner they will say the bankers are not importing (assist­ing). So, who are the bankers? Is it not the same bankers that are trading with government money? Is it not the same bankers that have instruments of government? Is it not the same bankers that have bonds of Nigeria government? So why won’t they give marketers money to trade? So bankers have never for once denied us access to funds. But the point is this we don’t just want this subsidy issue. For me it is not a good thing.

So the strike by oil marketers was called by a text message, not that you formally met and you agreed to go on strike?

No and that was why I told them yesterday I am giving them three hours to apologize. If they don’t apol­ogize then I must let Nigerians know the truth of what has happened. Let them come and tell Nigerians who or­dered the strike? It is very important because of the hardship that Nigerians have suffered almost in a week. In the history of Nigeria, apart from the last deregulation crisis, no time has even any of the unions ordered a strike that paralyzed the entire nation. Let me tell you sir, it took extraordinary measure for us to start giving products on credit on Sunday to hospitals, MTN. We had to give product on credit to MTN on Sunday because there was no banking mechanism to pay. We don’t just oper­ate like that. If there must be a contract you must pay money. But MTN had already informed all their senior staff not to come to work on Monday. So if MTN was to be paralyzed on Monday because IHS supplies MTN, Etisalat and some other companies. So, IHS by their advice that the system is go­ing to be shut down on that Monday, and MTN did not work so there won’t be communication on Monday? There won’t be communication on Tuesday? Banks already had taken their posi­tion by closing on by 1’ clock on that Monday. So, Nigeria would have been totally shut down because of four or five people.



By KayCee June 8, 2015 22:13