Govt queries subsidy claims, denies owing marketers N200b
Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala
THE Federal Government yesterday decried what it described as the ‘unpatriotic’ attitude of oil marketers, imploring them to put the nation first, when making their claims.
It also denied owing the marketers N200 billion.
Meanwhile, government says, but for the May 1 holiday, they would have received their alerts.
Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who spoke to newsmen in Abuja yesterday, also questioned aspects of the marketers’ claims.
She stressed that government would do its best to offset all genuine claims as this present government would not want to leave huge debt burden for the incoming government.
She also dismissed reports that subsidy was not provided for in the 2015 budget.
“As you know, we have revenue challenges because of the 50 per cent drop in the source of our main revenue. But despite these constraints, we have really prioritised this payment to marketers. We have gone to extra ordinary length to try and pay them. As you know, since December, we have paid half a trillion Naira (N500 billion) and you know that is not a small part of even our annual budget, if you were to compare.
“It is quite a lot of money. Of course it contains both of last year and this year, rolling. We have paid N500 billion. So, we have tried really, really hard.
“We also have appealed to them, that they are also Nigerians. With the fact that we have prioritised them and their payments so that Nigerians won’t suffer has been the main tenet of this: Let us try and pay even though we have serious revenue challenge so that Nigerians won’t suffer, Nigerians won’t be in queues. We have done that and we have been appealing to them on their own side, that they are Nigerians. They should not allow the country to suffer. Everybody is making sacrifices. But the marketers, as you know, the template that covers their business is designed to cover all their costs, plus a profit margin. That is the PPRA template against which I have quarreled for quite some time.”
She called for a closer scrutiny of the Petroleum Pricing Regulatory Authority (PPRA), noting that a situation where government pays for risks associated with oil import business and the beneficiaries still make the country suffer was not acceptable.
Her words: “It means that it is really a no-risk business for them or very little risk. But the risks are all well covered. That template says they must be paid exchange rate differentials, they have spent for the business.
“Based on that, government is taking the full burden of risks of their business, according to this template. Even when we have revenue shortfall and we cannot pay, then any interest that and we have been pleading with them because at the end of the day, the government is still the one paying for all these things.
“So, why are you making Nigerians suffer? Why all these long queues? It has become a situation where we have a cartel that can grind the nation to a halt at will. When they want something, they close all the stations and refuse to sell. When they see that they have got their way, they open the stations again. Is that not what is happening today? We have been labouring under this for a long time, trying to deal with it, trying to manage a group strong enough to hold the nation to ransom.
“I remember arriving August 17, 2011, when I came back as Finance Minister and the first thing that hit me was this big scandal of subsidy. More than N1 trillion had already been paid, and we went through that whole thing. Since then we structured, we cleaned up and you see that the amount that we have been paying year after year diminished substantially to about N971 billion a year, down from the N2.3 trillion of 2011. We need very substantial restructuring and changes to the whole process that brought the amount down for the nation.
“Yet, we have to deal with this problem, and the whole country has seen us trying our best, struggling. So, we are really appealing to the marketers with everything we have got. They should not hold the nation to ransom. They should not make Nigerians suffer unnecessarily.
“At the same time they are expecting government to bear every single cost, every cost. The template provides for everything, including their profit margin. So, it is a no loss business. I am not sure Nigerians know that. So, if you are doing that and you are expecting Nigerians to cover this cost, then why are you making Nigerians suffer?
“Now they are making very huge claims. As you know, we paid N156 billion recently N100 billion of the principle payment that we owe them, and then we paid N56 billion for interest rate and some remaining exchange rate differentials. Prior to that, we had just paid N31 billion to them for exchange rate differentials. At the time we paid that last week, what we had outstanding was N98 billion.
“This was last week. You know this thing is rolling, every week the PPRA sends us. We can only subscribe to whatever we have received that time and certified that this is what is due.”
On the exact amount government was owing, she noted: “As at now, since we made the announcement last week, it has now risen from N98 billion outstanding to N131 billion outstanding in principal payments, and they are now making a demand, and quoting N200 billion.
“I ask them what the balance is for. They are now making demands for huge sums in interest rate and exchange rate differentials. And we have said to them that what they are asking for is so large, and on exchange rate differential, in particular.
“PPRA needs to look at this. How is it being calculated? Is it in line with the exchange rate policy that was just announced by the Central Bank of Nigeria? Has the CBN certified that this is a proper way? Being that we had a huge exchange rate shock, is this the proper way for them to calculate this differential? When circumstances change, you need to look at your methodology. You cannot just keep doing the same thing as before. The country just went through a revenue shock, which led to a devaluation, and then exchange rate differential. Have they sat with the CBN to dialogue?”.
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17 Comments
This is serious o. So EVEN the Finance Minister is querying the amount owed for Fuel Subsidy payments……there is more than meets the eye on this issue even after all the bragodo claims of Jonathan’s team that all is under control.
The keg of worms is about to break out for all to see what happened……..since Jonathan & team started this fuel palavar in 2011 with not a single subsidy fraudulent claimant in the net for their evil deeds…
Looks like someone is trying to strategically lay the blame for a looming exposure on another persons door step…….We shall see about this!
May God have mercy upon our dear nation.
..God willing, we would get to the bottom of this scam and receive every kobo of refund back to the treasury of the federal republic….judgement day is near!
I really don’t understand all this technical details. All I know is that I have been buying fuel at 120 naira a litre at the filling station since this scarcity started for my car and generator. So it doesn’t make sense to me when when government says it’s paying for subsidy, exchange rate differential and import risk.
Please somebody explain to me?
that is where the corruption comes in. the govt is paying all this subsidies so that fuel is sold at N90-100. however the marketer are not selling at those prices and yet getting more money from the govt. we need to push the new govt to immediately get the refining of fuel going.
Is the cartel or cabal in the industry more powerful than the government such that it could disregard the govt targeted price range(of 90N-100N),for which the subsidy is being paid, and profiteer at the expense of the consuming public without consequences?You can imagine the finance minister expressing frustration over the conduct of the cabal and questioning why they should shift the attendant risks to their business to the tax-payers and still be callous to make us suffer, yet govt cannot rise and cut these greedy rogues to size.The minister is even uncertain as to how these products are priced by the relevant agency and how the subsidy calculations are been done. She just pays whatever bill the PPRA presents to her,whether or not it is over-invoiced.There are too many leakages to plug.A privileged few are just sapping our money through various means,with impunity, and our govt is letting them get away with the criminality.It’s so painful and unfortunate!
I strongly believe that the “day of judgement” is very close by! What on earth is this stupid subsidy that allows a handful of stinkinly rich Nigerians to hold everyone else to ransom? Let Buhari’s incoming government tackle this problem headlong by resuscitating all our refineries right away and send these so called marketers packing!!! If other nations of the world blessed with oil like Nigeria are managing their God-given natural resource very well, let us learn from them and stop these rogues from doing whatever they liked with and holding everyone to ransom!!! And by the way, I want to suggest to GMB/Osibajo duo that they should consider keeping Okonjo-Iweala as our Finance Minister. She’s doing her very best but the PDP wouldn’t let he perform. She’s very smart, knowledgeable, considerate and a woman of international standard. We want such people on the list of ministerial appointments to retain her portfolio as Finance Minister. This is a very important and key decision for APC. Let us not be partisan about it unless there is a better choice than Okonjo whose resume can prove that he or she would perform. The interest of Nigerians is paramount than the interest of a few who are stinkingly rich from this so called marketeering of our petroleum and other derivates!!!!!
Ir seems this oil subsidy phantom is an ever evolving ghost.to the point that today there is no one single officer who can with certainty say how much fuel was brought in and subsidised for. That had fed the corruption monster in both the Public and Private sectors involved in the shady oil business. Unfortunately the out-going administration was far more interested in the balmegame than confronting the crooks that have defrauded Nigerian for long.
The burden of fuel subsidy is too much on Nigeria. This must stop. All our refineries must be make to work optimally to full capacity while new and more refineries are build. so that this so called fuel subsidy should stop. The corruptions and cabals are holding Nigerians to ransom. Enough is enough. God bless Nigeria.
the only way to end this is to open up the market and let fuel be sold at market rate. we are wasting a lot of money for no benefits. anytime this marketers believe they have a problem, they create shortage. this shortage cost the nation billions in lost productivitity. we need to serious look at solving our refining problem, sell fuel in the open market and stop paying this marketers this huge sum.
Dr Iweala Why cant you use your position as a finance minister to advice Mr Jonathan government to invest in the refinery ? Are the cabals oil marketers after your life too? You came in you saw the scandalous system you join them in fleecing Nigeria.You can not convince me this the best deal for Nigeria. I am disappointed.
The IMF lady is not interested in growth in Nigeria. She is interested in entertaining whom ever is president. Behaving like she is working while she is warming the bench!
And you know this how? Why must you resort to saying unflattering things that have no basis in facts. If you know anything about this issue with the oil marketers, like most other people here, you would have had something more intelligent to contribute.
And of course we will always hear from the paid trolls.
God help NOI to transform this great Nigeria,she has decided to speak up,marketers are so heartless,we should be aware of what they are capable of doing all because of money
In Nigeria
we need one another for peace,the marketers are just brunch of greedy people
only after their selfish interests,seriously we need help in this country,
For years, Madam Iweala said we should put an end to subsidy and nobody listened. These marketers are scammers and now they are showing their fangs. The CME is absolutely right! The oil subsidy is nothing but a big scam which must end.
IMF is 419 and who makes IMF minister of oil or Finance? China does nothing with IMF, thus China grows!
We will review and take appropriate action.