Fuel Scarcity Looms As Marketers Unpaid Subsidy Backlog Hits N300b

Another round of fuel scarcity may be around the corner as the backlog of unpaid sub­sidy claims has risen to about N300 billion at the moment. This follows recent findings that about 11 batches of fuel supplies by marketers are yet to be cleared by the Ministry of Finance since November 2013.

A source hinted that the backlog of payments as of today include five batches of payment – Batch R/13 to V/13 pertaining to product discharg­es in 2013 amounting to over N100 billion. It was further learnt that another six batches of payment from A/14 to F/14 amounting to over N150 billion pertaining to January-April 2014 are yet to be paid. Some marketers have al­ready expressed worries over the huge backlog, which is se­riously affecting the supply of fuel to the country.

A source at the finance ministry said marketers who don’t want to be named have already turned down their of­fer for the third-quarter allo­cation for the supply of petrol due to non-availability of fund and increased interest rate by banks.

The concern, however, is that banks who ought to give marketers fresh loans are not too keen to do so now due to the failure by the marketers to settle their debt as at when due.

According to the source, the delay in the settlement of subsidy debt is even affecting 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.

Investigation also revealed that already most of these pay­ments were processed by the Petroleum Products Pricing Regulatory Agency (PPPRA) and forwarded for payment to the Ministry of Finance for payments.

Commenting on the de­velopment, Special Assistant to the Finance Minister, Paul Nwabuikwu, said “we have received several enquiries regarding the status of pay­ments to oil marketers for fuel imports”. He noted that only marketers whose claims have been cleared after they have gone through the verification processes are paid. According to him, this is to ensure that the unpleasant experiences of the recent past with regard to wrong and irregular payments are not repeated.

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. Nwabuikwu said that other claims are being at­tended to.

He explained that 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.