The Senate on Wednesday recommended the payment of N348 billion as outstanding subsidy payment to 74 petroleum marketers.
Out of the 74 oil marketers, 55 will receive N275.75 billion and 19 others will get N73.45 billlion from the total sum.
The approval to pay the marketers followed adoption of the interim report of the Committee on Petroleum Downstream on the Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers.
In the report, the lawmakers recommended that the 55 oil marketers be paid 100 percent of their claims, while the Committee also called for the payment of 65 percent claims to other marketers due to contentions in their figures.
The Upper Chamber noted that paying the marketers would stem the threat of fuel scarcity, increase economic activities and promote a more harmonious working relationship between the government and Oil Marketing Companies (OMCs).
The Senate, however, directed its committee “to continue its engagement with the OMCs, Ministry of Finance, 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.”
In his explanation, the Chairman of the committee, Sen. Kabir Marafa (APC, Zamfara State), noted that although marketers made claims to the tune of N670,497,543,15, as of June 30, 2017, the PPPRA verified and approved the sum of N429,054,203,228 to the Federal Ministry of Finance.
The lawmaker pointed out 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 N407,255,263,288.
According to the Committee, “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 its report added that, “this issue including 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.
“This committee will be submitting to the Senate in due course. This submission should 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;
While Aiteo got N4,988,199,360; Conoil got N5,588,285,132; Forte Oil N15,480,445,907; Bovas N5,953,684,258; Capital Oil N8,339,052,402; Mobil N8,282,363,478; MRS Oil and Gas N20,948,270,002; Oando N14,972,585,600; Total N21,569,996,843 among others.
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