The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala has stated that there is no call for marketers or other stakeholders to go on strike because government is addressing subsidy payment issues.
In a statement released by the office of the minister on Thursday, July 26, 2012 the Federal government is dealing with the issue of subsidy payment in a structured way that protects both the interest of the country and those of genuine marketers.
Dr. Okonjo-Iweala has directed the Debt Management Office (DMO) to pay marketers with verified claims as soon as supporting Sovereign Debt Notes are provided by the Petroleum Products Pricing and Regulatory Agency (PPPRA).
The directive is to reinforce the federal government’s determination to ensure that there is no disruption in fuel supplies across the country.
According to the statement, the verification of claims is a cornerstone of the procedures adopted by the Federal Ministry of Finance for managing fuel subsidy payments and prevents overpayments.
She clarified that following the report of the Presidential Committee headed by Mr. Aigboje Aig-Imoukhuede, some marketers also owe government significant sums of money and that government expects that these will be paid.
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA) had Monday, July 23, 2012 threatened to shut its operations within 48-hours if government failed to pay the subsidy claims to marketers.
Mr Dapo Abiodun, the President of the association, gave the ultimatum in a telephone interview with the News Agency of Nigeria (NAN) in Lagos.
Abiodun said that government’s failure to pay all verified and outstanding subsidy claims would force the members to suspend supply and distribution of petroleum products nationwide.
“We are not fighting government but what we are saying is that government should pay all our outstanding subsidy claims which have affected our operations.
“If after 48-hours government fails to effect payment, we, the members of DAPPMA are going to put our operations on hold nationwide pending when it is paid,” he said.
Abiodun said that banks were charging marketers about N1.80k as interest on a litre of petrol per month due to non-payment of the subsidy claims by government.
He said that it costs members about $30 million to import 30,000 tonnes of petrol, adding that non-payment of subsidy had resulted to huge debts from funds borrowed from banks.
According to him, the bank loans used to finance importation of petroleum products have continued to accrue interests over and above the 45 days.
He said also that the decision of Federal Government to suspend indefinitely all verified and outstanding subsidy payments since January had exposed its members to financial crisis.
“Our members have been exposed to harsh effects of the devaluation of the naira.
“That will make it impossible to fully repay the outstanding dollar denominated loans when eventually payments are made by the Federal Government.”
Abiodun said the situation had made it imperative for marketers to demand also the payment of all accrued interests over and above the contractual period.
He said that the association was not against the ongoing investigation of the 2011 subsidy claims by marketers but requested for the full payment of 2012 subsidy claims so far.
“We have subjected ourselves to the various panel investigations but nothing came out of the reports. Government doesn’t have reason to hold payment of claims when marketers duly imported products.”
Meanwhile, Wole Ademolekun, the General Manager, Operations of the Petroleum Products Pricing Regulatory Agency (PPPRA), said that they would not join issues with marketers on the subsidy payment.
“As an organisation, we don’t comment on this. We have seen advertisements, we have seen so many things but we don’t comment on such.
“Even what you have said now, it’s not accurate but we don’t want to join issues with them. It was JEFTON, now DAPPMA that went and placed an advertorial. Everybody is making a statement and we don’t want to join issue with them,” he said.