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Published On: Thu, Jul 3rd, 2014

Fuel scarcity looms over backlog of subsidy debts owed oil marketers

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Mrs. Diezani Alison-Madueke

Mrs. Diezani Alison-Madueke

By Etuka Sunday

Nigerians may once again face a protracted fuel scarcity situation, on account of an alleged refusal of the federal government to pay a backlog of subsidy payments to oil marketers put at almost N250 billion.

A document obtained by Peoples Daily from one of the marketers, who spoke to our reporter, but preferred anonymity, indicated that the backlog of payments as at date include five batches of payment; Batch R/13 to V/13 pertaining to product discharges in 2013 which amounted to over N100 billion.

In addition to that, there are another six batches of payment from A/14 to F/14 amounting to over N150 billion pertaining to January –April 2014 which are yet to be paid.

Some marketers have already expressed worries over the huge backlog said to be seriously affecting the supply of the fuel into the country.

Source at the ministry said marketers who don’t want to be named in papers have already turned down their offer for the third-quarter allocation for the supply of petrol into the country, due to non-availability of funds and increase in interest rate by banks.

It was also gathered that the moral of the banks to give marketers fresh loans is very low due to the failure by the marketers to settle their debt as at when due.

The delay in the settlement of subsidy debt is said to have also affected the payment of the equilisation fund of transporters at the Petroleum Equilisation Fund (PEF) due to the failure of fuel marketers to settle the equalisation fund to the board.

It was gathered that already, most of these payments were processed by the Petroleum Products Pricing Regulatory Agency (PPPRA) and forwarded to the ministry of Finance for payments.

It could be recalled that in March this year, the Independent

Petroleum Marketers Association of Nigeria (IPMAN) alleged that the failure of the federal government to settle backlogs of petrol subsidy claims of its members and other petroleum marketers in the country was responsible for the lingering fuel scarcity across the country.

Speaking more on the association’s claims of non-payment of subsidy claims, the president said: “We are talking about major fracture in the system. Only 60 per cent of Q3 subsidy claims have been paid.

However,, the federal ministry of finance, in response to the allegation, has said that only marketers whose claims have been cleared after they have gone through the verification processes are paid. “This is to ensure that the unpleasant experiences of the recent past with regard to wrong and irregular payments are not repeated.” The ministry said

A statement from the ministry in Abuja yesterday responding to inquiries on the matter and signed by Paul C Nwabuikwu, Special Adviser to the Coordinating Minister for the Economy and Minister of Finance disclosed that the process for the latest batch of payments totalling N45 billion is currently on and the Office of the Accountant-General of the Federation (OAGF) has confirmed that some marketers who have submitted letters of indemnity to the OAGF have already been paid. Other claims are being attended to.

“The Letters of Indemnity are an additional requirement for payment because banks which financed imports by some marketers had written to the OAGF through their lawyers to complain that their clients (the marketers) are making interest payments through other banks contrary to the terms of agreements reached. The banks in question are insisting that the interest payments be made through them since they granted the facilities that attracted the interest.”

The ministry said to ensure that the federal government is not held liable in the event of any litigation between these banks and their marketer-customers, the OAGF has instituted the new procedure.

“It is important to note that subsidy payments are made retroactively because claims must go through all the necessary processes before they are approved and paid. Government will continue to discharge its obligations to marketers whose claims are approved”, it stated.


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