FG Begins Payment of 2012 Fuel Subsidy Claims

A potential fuel shortage in the
country following the
suspension of subsidy payments
to importers of petroleum
products has been averted as
the payment of verified claims
to the affected marketers has
started. This followed the
suspension of payment of 2011
subsidy arrears.
This is coming as the Federal
Ministry of Finance has said
that it had spent N451billion
out of the N888 billion budgeted
for
the payment of subsidy in
this year’s budget, on the
payment of arrears for 2011
alone to beneficiaries.
The ministry also said that next
month’s meeting of the Federal
Accounts Allocation Committee
(FAAC) would decide on the
resumption of the payments for
the
arrears of 2011, adding
that it would pay only verified
marketers.
It was however gathered that
the ministry, through the Debt
Management Office (DMO), has
started issuing Sovereign Debt
Notes (SDN) to marketers for
2012 subsidy to enable them
collect their money from the
Central Bank of Nigeria (CBN).
To avoid what it called “extra
budgetary expenditure”, the
ministry had suspended
payment of arrears of 2011,
after the claims overshot the
budget.
The arrears of 2011 were in
respect of the import permit
issued to marketers in
December 2011, which also
covered the first quarter of
2012.
But
to avert fuel crisis, the
DMO has begun to release the
SDN for the payment of subsidy
for 2012, which covers the
second quarter of 2012.
Marketers, who spoke to
THISDAY, confirmed that
payments for 2012 subsidy has
commenced.
“They have started releasing
payments for 2012 subsidy,
while the arrears for the 2011
remain suspended, pending the
resolution of the contentious
issues. Marketers have also
been asked to come to the DMO
for
their Sovereign Debt Notes
for 2012,” said one of the
marketers.
However, the Coordinating
Minister for the Economy and
Minister of Finance, Dr. Ngozi
Okonjo-Iweala, said yesterday
that while her ministry would
be ready to work with relevant
agencies for the common good
of Nigerians, it would not be
stampeded into making hasty
payments on fuel deliveries
that had not been
substantiated or verified.
In a statement by her Senior
Special Assistant, Mr. Paul
Nwabuikwu, the minister noted
that in line with this focus, her
ministry would continue to pay
all marketers whose claims of
fuel importation had been
verified as genuine, adding that
speculation that prudence in
subsidy payments would cause
fuel scarcity was wrong.
“Indeed, to say that the
Ministry’s efforts to learn
lessons from the past and
reform the way payments are
made will lead to fuel scarcity is
simply not the case,” she said.
She disclosed that based on
PPPRA and NNPC’s claims, N451
billion of the N888 billion subsidy
budget for 2012 had already
been spent on arrears for
2011.
“Since
the NNPC/PPPRA’s
estimate for the 2011 arrears
was N232 billion, this means
that more than double the
projected amount has already
been spent and those agencies
are still bringing in more claims,”
she said.
She said this is clearly not
sustainable, adding that her
ministry has a responsibility to
ensure that the lapses that
may have led to this unhealthy
situation are not repeated.
“That is the least that the
ministry owes the Nigerian
people. In line with the directive
of the President, the ministry
will continue to work towards
the improvement of the fuel
subsidy regime based on the
lessons learnt from our recent
experiences.
The ministry is determined to
put in place a strong
framework for the fuel subsidy
regime that is both
transparent and sustainable,”
she explained.
She stated that the “ministry’s
approach to improving the
subsidy regime is predicated on
ensuring that the country’s
finances are managed in a
manner that clearly protects
the interests of the Nigerian
people; putting in place a
system that ensures that only
the genuine claims of genuine
marketers are honoured and
also performing its functions in
an efficient and proactive
manner to ensure that
Nigerians get fuel at the right
time and at the right price”.
The NNPC had earlier raised the
alarm that the Ministry of
Finance was about to plunge
the country into fuel crisis, by
providing in the 2012 budget,
fuel subsidy based on the daily
consumption figure of 19 million
litres, instead of the actual
figure of over 33million litres
that the ministry gave to the
Federal Government.
But the ministry insisted that
the issue of underestimation did
not arise because the NNPC
and
PPPRA which had the
responsibility did not provide
any basis for estimation of
consumption.
Source: Thisday Newspaper