The Federal Government has restated its commitment to continue to pay all verified subsidy claims to oil marketing and trading companies and other independent importers of petroleum products.
The Co-coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, who stated this at the weekend, also stated that the government was awaiting the report of the committee set up by her ministry and the oil marketers to verify the additional claims arising from accumulated interest on delayed payment and foreign exchange rate differentials.
About 46 oil marketers in the country have been groaning under the yoke of heavy debts following the failure of the Federal Ministry of Finance to pay them the outstanding verified subsidy claims and importation cost amounting to almost N180 billion as at October 10 this year.
About N19 billion is outstanding for 2013 discharges while about N161 billion is outstanding for 2014 discharges.
The delay in the payment of the claims had prompted the marketers to appeal to the Minister of Petroleum Resources, Diezani Alison-Madueke, to “talk to Okonjo-Iweala” to pay their outstanding claims to avert an end-of-the-year fuel crisis.
But Okonjo-Iweala said that though the government is indebted to the marketers, the marketers are also being paid varying amount, which have been published.
She also admitted receiving a letter from the petroleum minister, requesting her to pay the marketers their outstanding claims, adding that she has responded appropriately to the letter.
On the issue of the accumulated interest and foreign exchange rates differential arising from the delay in payment of subsidy claims, the minister stated that her ministry and the oil marketers had met in Lagos and agreed to review the claims due to the marketers.
She confirmed that at the meeting, which she personally attended, a committee was set up between her ministry and the marketers to carry out the review.
“On the letter, yes, there was letter to which I responded. We have set up a committee between the ministry of finance and the oil marketers to agree on the interest rate and exchange rate differentials. In the meeting, we agreed to do the review together. We decided that we will review it in such a way that it will be fair to the ministry of finance and the marketers to arrive at a balanced position,” she said.
Speaking further on the issue of subsidy, the minister stated that her ministry had agreed that it would pay a part of the claims every month to reduce the balance.
She, however, stressed that against the backdrop of the falling crude oil prices at the international market, the ministry of finance cannot manufacture money as the federal government depended on oil revenue and non-oil revenue.
“So, it is not that the ministry of finance has refused to pay anyone. We are committed to paying whilst we wait for the outcome of the report of the committee that is reviewing outstanding payments on exchange rate differentials and interest rate,” she added.
A copy of the petroleum minister’s letter dated September 4 and addressed to Okonjo-Iweala was titled: “Re: Subsidy-related Payments – Release of 2013 Marketers’ Claims and Payment of Importation Cost.”
In it, Alison-Madueke stated: “CME will recall that in 2014, Sovereign Debt Note (SDN) of N149,636,133,457.76 was issued to marketers as claims processed for 2013 discharges. Out of this amount, N19,043,957,655.42 for Batches U/13 and W/13 still remain as unsettled claims.
‘Total volume of 3,694,769,663.50 litres of PMS with an equivalent amount of N179,621,634,671.15 was verified by the Petroleum Product Pricing Regulatory Agency (PPPRA) for which SDN was issued to marketers for 2014 discharges. Out of this amount, SDNs for the sum of N19,307,882,666.50 were released to marketers while the corresponding SNDs for the sum of N160,313,752,004.65 are yet to be released by the Debt Management Office as at 29th August, 2014. A summary of 2013/2014 verified claims for other marketers for which SDNs are yet to be released stands at N179,357,709,660.07.”
The petroleum minister further pleaded with Okonjo-Iweala to reverse the order suspending reimbursement associated with the payment of interest charges and foreign exchange differential to the marketers.
In a separate statement, the Special Adviser to the minister on Media, Paul Nwabuikwu, said last night that N336 billion was paid to the marketers from December 2013 to September 2014.
This figure includes N7.7 billion arrears owed five marketers that were not referred to the Special Fraud Unit for further investigation for alleged subsidy fraud.
The five marketers, which were paid the arrears, include Downstream Energy Source Limited, Fargo Petroleum and Gas Limited, Honeywell Oil and Gas Limited, Ontario Oil and Gas Nigeria Limited and SPOG Petrochemical Limited.
Nwabuikwu noted that the payment processes are very rigorous in line with the wishes of Nigerians for transparency and accountability in the management of the subsidy regime.
“That is why we publish the details of amounts paid along with the names of marketers whenever payments are made. The marketers are, of course, are very important in this process. That is why the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, met with them some weeks ago to discuss their concerns about delays in payments.
“At the meeting, the minister in her characteristic forthright manner, explained the revenue constraints facing the country and reassured them that government will continue prioritise and make payments as funds are available,” he explained.