Fuel scarcity may resurface in the country following disagreement between the Federal Government and Major Marketers Association of Nigeria (MOMAN) over the outstanding subsidy payment totaling over N94 billion.
Addressing journalists in Lagos on Tuesday, the Executive Secretary, MOMAN, Femi Olawore, stated that contrary to claims by the Federal Government through the Federal Ministry of Finance that it has paid all outstanding regarding subsidy claims by marketers, “the major marketers are still being owed a total of N94.157 billion.”
According to him, “we acknowledge the fact that the Government through the Federal Ministry of Finance has brought transparency and sanity into the payment of subsidy claims.
“However, it is to be noted that interest claims do not just happen. They are as a result of interest changes on borrowed funds from the banks. This means no importer makes any gain on interest claims. Rather, claims made by importers are actual debit notes from banks, which have always been verified by Petroleum Products Pricing Regulatory Agency (PPPRA) and the Federal Ministry of Finance before payment is made through importers to the banks.
“The general public needs to be told on how and why importers make claims on interest and foreign differential cost. Under the Petroleum Support Fund (PSF) approved guidelines as amended, the PPPRA is obligated to reimburse oil marketing companies within 45 days the loss incurred by them arising from the differential between the landed cost of the product and government approved pump price.”
He specifically stressed that subsidy, according to the guideline “will apply when the landing cost of product based on import parity is in excess of the approved PPPRA ex-depot price for the product.”
However, Olawore argued that the 45-day payment cycle was arrived at by the PPPRA, Federal Ministry of Finance, Central Bank of Nigeria (CBN), Department of Petroleum Resources (DPR), Major Oil Marketers Association of Nigeria (MOMAN), Independent Marketers Association of Nigeria (IPMAN), Depot and Petroleum Products Marketers Association (DAPPMA) and commercial banks.
He said claims for interest and foreign exchange differential arise from failure to adhere strictly to the dictates of the PSF Approved Guidelines of 45 days. He stated that no marketer or importer will allow herself to be embarrassed by banks threatening to sue or report defaulting marketers to Government financial agencies; any payment made after 45 days affects liquidity position and ability to pay suppliers which ultimately affects the supply situation.
“It is very strange to read in the advertorials that interest and foreign exchange cost claims shall not be honoured again when the Federal Ministry of Finance has just paid for part of November 2013 imports. In other words part of November, all of December 2013 and January to June 2014 are still outstanding. Who bears the interest charged by banks? In rudimentary finance, interest on loan shall always arise when the principal sum remains unpaid. Therefore, as long as banks charge marketers interest for loans so long shall we make claims for restitution when the Federal Ministry of Finance still owes the principal sum,” he said.
According to a document he presented to reporters, as at June, 2014, a total of N190.56billion was being owed by the Federal Government to all marketers; out of which N94.157billion is being owed to MOMAN members comprising of Forte Oil, Conoil, Total, Mobil, MRS and Oando.
In conclusion, Olawore threatened that: “we need to remind the Federal Ministry of Finance that scarcity doesn’t just happen. It takes months and this is why it is difficult to clear. We are gradually moving towards the end of the year and to enable importers continue to import product and wet the whole country without any semblance of scarcity, all outstanding amounts must be paid immediately.” – Nigerian Tribune.
