Subsidy debt: Marketers may halt petrol importation

Subsidy debt: Marketers may halt petrol importation
Fuel Scarcity

Petroleum product marketers under the aegis of Major Oil Marketers Association of Nigeria have warned of a looming scarcity of fuel following the inability of the Federal Government to pay the subsidy arrears for the importation of Premium Motor Spirit.

The marketers warned that if the situation was not resolved on time, it could lead to another round of fuel scarcity in the country.

MOMAN said in a statement last week that the aim of the Petroleum Subsidy Fund was to ensure the reimbursement of the marketers of agreed and verifiable costs of delivery of PMS to the consumers in excess of the market price of the product.

According to it, the scheme also ensures the repayment of any excess of the market price over the costs incurred by the marketers whenever this occurs (over recovery).

In a letter addressed to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, the association, through its Executive Secretary, Mr. Thomas Olawore, stated that despite previous assurances from the government to reimburse the marketers for under recovery as verified by the Petroleum Products Pricing Regulatory Agency, it had failed to honour the agreement.

The letter read in part, “At the previous meeting, you empathised with the marketers and committed to full restitution provided these were verified by the PPPRA. You also assured the marketers that they would be fully reimbursed for the interest (incurred due to the late payment) and foreign exchange differential elements of their under recovery within 30 days of the meeting.

“Furthermore, you committed to immediately issuing Sovereign Debt Notes for the outstanding under recovery with full payment on or before April 28, 2015.

“Regrettably, despite your above commitment and assurances, the industry to date has only received approximately N30bn in forex differential claims out of the N100bn owed. In the same vein, only N345bn has been received in core subsidy payments, covering payments up to the second quarter of 2014.

“Specifically, only three companies out of the six MOMAN companies received payments for forex differentials and no company, MOMAN or Depot and Petroleum Products Marketing Association, has been paid interest charges on delayed payments.”


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