Fuel subsidy: FG owes marketers N200bn

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Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke

Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke

The Federal Government currently owes petroleum product marketers in Nigeria over N200bn as verified and unpaid subsidy claims.

The marketers stated this in a joint statement signed by Depot and Petroleum Products Marketers Association, Major Oil Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria and Nigerian Independent Petroleum Company on Friday, addressed to the Petroleum Products Pricing Regulatory Agency, the Presidency, Ministry of Petroleum Resources and Ministry of Finance.

They said, “We, the downstream petroleum industry companies from the private sector participating in the Petroleum Support Fund scheme, hereby acknowledge receipt of the Quarter 3, 2012 Premium Motor Spirit allocation.

“The current business environment in the sector makes it necessary to bring to your attention factors that inhibit our ability to import the said volumes in Q3, 2012.”

They also said, “Due to the fact that issuance of Sovereign Debt Notes covering balance 2011 and 2012 PMS imports transactions were initially severely delayed and now currently suspended, we have huge outstanding, verified and unpaid subsidy claims in excess of N200bn from the Federal Government.”

The marketers stated that non-reimbursement of the subsidy claims impaired the ability of their companies to meet their obligations to the banks for loans advanced for the purpose of importing PMS under the scheme.

This inability to repay, they said, had led to high interest rate and exchange rate differential exposure, which had to be claimed by the participating companies and reimbursed by the Federal Government.

According to them, conflicting statements by senior government officials on the amount appropriated for subsidy in 2012 and the subsequent halt in issuance of the Sovereign Debt Notes had led to uncertainty and banks were reluctant to provide further funding for importers.

They said a few banks that were willing to offer loans gave them severe and uneconomic terms.

The marketers said the volume of imports by operators was dwindling at an alarming rate due to non-reimbursement of outstanding subsidy claims and the inability of importing companies to secure financing.

“Despite the recent allocations awarded, there is currently no prospect for a reversal of the trend, which had immense implications for the efficient supply and distribution of PMS to the Nigerian public,” they added.

In : Business

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