The Debt Management Office (DMO) has started the fast track of settlement of arrears through promissory notes to oil marketers.
The DMO said in Abuja at a meeting with the Senate Committee on Downstream Petroleum Sector to discuss the issue of the outstanding payments to oil marketers.
According to the statement, the implementation is in line with the process approved by the Federal Executive Council (FEC).
It also quoted Sen. Kabiru Marafa,the Chairman of the Senate committee, as calling the meeting to ascertain the status of the implementation of the approvals given by the National Assembly for the settlement of arrears to oil marketers.
The meeting was attended by representatives from the Ministry of Finance, DMO, Central Bank of Nigeria (CBN), Petroleum Products Pricing Regulatory Agency (PPPRA) and representatives of oil marketers.
The obligations due to the oil marketers represent interest accruals and foreign exchange differentials, it said.
“The committee also requested the CBN to confirm the position on a statement by oil marketers that there was an agreement to stop the accrual of interest on loans owed by the oil marketers to banks.
“The Senate committee had earlier approved an amount to be paid to the oil marketers in July, but the complete approval of NASS, required by law for the issuance of government debt securities, was only received when a resolution conveying the approval of the House of Representatives was issued on September 26.
“On the strength of the provisions of the law, therefore, implementation could not have commenced prior to September 26.”
The DMO said that the current administration as one of its strategies to address inherited arrears to various contractors, approved the issuance of promissory notes to various categories of creditors.
It added that after the approval by FEC, President Muhammadu Buhari presented a request to NASS, as required by the Fiscal Responsibility Act, 2007.
“The categories of creditors for whom the settlement of arrears was approved by FEC include pensioners and staff, contractors, construction companies, exporters, DisCos, GenCos, State Governments, Judgement Debts and the petroleum marketers.
“To ensure transparency and value for money to the Federal Government in the settlement of these arrears, FEC had specified the processes to be adopted in the issuance of the promissory notes, one of which is the validation of the claims by an international accounting firm operating in Nigeria.
“The benefits of this initiative by the current administration include the return by contractors to project sites, thereby improving infrastructure and creating jobs.”
The DMO noted that another benefit was that there would be an improvement in the ability of banks to lend to the real sector.
This is because since some of the creditors to be settled are indebted to banks, the issuance of the promissory notes will enable them to repay their debts to the banks.
The DMO also said at the hearing that it would meet with the oil marketers in November.