The Senate has approved the payment of =N=348 billion as outstanding subsidy claims to 74 petroleum marketers.
This followed adoption of interim report of its Committee on Petroleum (Downstream) on the Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers.
Out of this amount, 55 oil marketers are to receive =N=275, 750,415,108 while 19 others will get =N=73, 452,639,866. While the committee recommended that the 55 oil marketers be paid 100 percent of their claims, it called for the payment of 65 percent claims to other marketers due to contentions in their figures.
Senate also mandated the committee to continue its engagement with the Ministry of Finance, oil marketing companies, Petroleum Products Pricing Regulatory Agency (PPPRA) and other stakeholders in order to update all the outstanding liabilities and clear all outstanding debts, interest accrued and forex differential once and for all.
Chairman of the committee, Senator Kabir Marafa who presented the report during Wednesday’s plenary, noted that although marketers made claims to the tune of =N=670, 497,543,15billion, as of June 30, 2017, the PPPRA verified and approved the sum of =N=429, 054,203,228billion to the Federal Ministry of Finance.
He explained that while the verified figure was approved by the Federal Executive Council, further verification by the Presidential Initiative on Continuous Audit, (PICA) reduced the amount to =N=407, 255,263,288billion.
The panel observed that continuous delay of the approval of the promissory note request will affect the liquidity of the Oil Marketing Companies and undermine their crucial role in the development of the economy.
The committee in the report signed by 17 out of 22 members explained that the determination of the terminal date of the subsidy programme amount paid to the OMCs and the interest accrued from 30th June, 2017 to date will be taken up and resolved in the final report.
Accordingly, the report indicated that “a submission that would be able to reconcile and bring to the conclusion all issues in respect of petroleum subsidy programme implementation and payments;
“Further verification needs to be made to ascertain the discrepancies between the OMCs and the recommendations for payment made by FMoF (PICA). In this respect, the Committee is of the opinion that interim payments should be effected to the OMCs pending full verification of PICA recommendaTions and updating on the full implication of interest accruals from 30th June 2017 to date.
“The Government’s inability to pay the OMCs as at 30th June, 2017 has further increased its liability since the interest continued running till date, hence, the need for further work by the Committee to compile and update the level of indebtedness and its interest accruals;
“However, in view of the fact that the service of the OMCs is very important to the economic development of the country and closely tied to National security, paying the marketers would stem the threat of fuel scarcity, increase economic activities and promote a more harmonious working relationship between the Government and OMCs”.
Notable among the oil marketers and the amount approved for them are: Aiteo =N=4,988,199,360; Conoil =N=5,588,285,132; Forte Oil =N=15,480,445,907; Bovas =N=5,953,684,258; Capital Oil =N=8,339,052,402; Mobil =N=8,282,363,478; MRS Oil and Gas =N=20,948,270,002; Oando =N=14,972,585,600; Total =N=21,569,996,843 among others.
