The Ghost at the Door

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Okonjo-Iweala

Fuel scarcity looms again as marketers shun importation following federal government’s failure to settle outstanding claims due to them

By Anayo Ezugwu |  Jul. 7, 2014 @ 01:00 GMT

NIGERIANS may face another round of petrol scarcity following the failure of the federal government to pay subsidy claims totalling N300 billion to oil marketers. The unpaid subsidy claims may throw the country into another round of fuel scarcity because marketers have shunned importation for the third quarter.

It was learnt that there are about 11 batches of fuel supplies yet to be paid for by the ministry of finance since November last year. These include the backlog of payments for Batch R/13 to V/13 pertaining to products discharged last year amounting to more than N100 billion. Besides, there are six other outstanding batches of payment from A/14 to F/14, amounting to over N150 billion for the period January to April 2014.

This development has led to some disquiet among marketers, who are beginning to complain about the mounting debt which has affected their ability to continue importation.  Subsequently, many marketers have already turned down the offer for third-quarter allocation for fuel import due to non-availability of funds and increase in interest rate by banks.

The willingness of banks to grant loans to marketers is said to be dwindling as some of them could not settle their indebtedness as and when due.  The delay in settling subsidy claims is believed to have adversely affected the payment of equalisation fund to transporters from the Petroleum Equalisation Fund, PEF. Most of the outstanding payments were said to have been processed by the Petroleum Products Pricing Regulatory Agency, PPPRA, and forwarded to the finance ministry for payment.

But the ministry of finance has said that it was verifying the oil marketers for the payments. Paul Nwabuikwu, special adviser to Ngozi Okonjo-Iweala, coordinating minister for the economy and minister of finance, said in a press statement, that the ministry was processing the payments of subsidy claims to verified marketers, amounting to N45 billion.

According to him, only marketers whose claims had been cleared after the verification processes were being paid. This, he said, was to ensure that the unpleasant experiences of the recent past with regard to wrong and irregular payments were not repeated.  “The process for the latest batch of payments totaling 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. 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,” he said.

Nwabuikwu also reiterated federal government’s commitment to continue to discharge its obligations to marketers whose claims are approved. But whether this process would avert the impending fuel scarcity is yet to be seen.

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