The Oil Marketing and Trading (OM & T) companies involved in the importation of petroleum products have insisted that the federal government should pay interest rate for its failure to pay fuel subsidy within 45 days cycle stipulated under the Petroleum Support Fund (PSF) scheme, THISDAY has learnt.
THISDAY gathered that this demand was one of the major recommendations of the Technical Committee on Delay of Payment of Subsidy, which was set up after the recent stakeholders’ meeting with the Petroleum Products Pricing Regulatory Agency (PPPRA).
The seven-member pan-industry committee was set up last month to explore ways of resolving the lingering dispute between the Ministry of Finance and the OM &T companies over delays in payment of subsidy.
It was learnt that the committee, which submitted its report to the PPPRA at the weekend, noted that with the introduction of the Sovereign Debt Notes (SDN), the federal government had in 2010 stopped the payment of interest for delaying subsidy. This, he said, stemmed from the impression that the SDN issued to the marketers after importation was meant to be as good as cash. But despite the introduction of the SDN, the committee observed that the government has continued to delay payment of subsidy beyond the stipulated 45 days.
A source privy to the recommendation of the committee told THISDAY that the last time the government paid the marketers interest was in 2010 when a total of N19 billion was paid as interest. According to him, the SDN arrangement introduced after that period did not envisage any further delay in subsidy payment.
He however noted that the government recently approved for the payment of interest to the Major Oil Marketers Association of Nigeria (MOMAN).
“MOMAN always operates as a pressure group and that was why government directed the PPPRA to compute their interest but they have not been paid up till now. They have not been issued Sovereign Debt Notes,” he said.
He further stated that delaying subsidy by the government amounted to enriching the banks for doing no job.
“The government is enriching the banks by not paying subsidy as at when due because marketers pay interest on loans they borrowed for fuel importation. This amounts to enriching the banks for not doing any job. The committee therefore recommended that the government should respect the 45 days cycle and pay subsidy as at when due. The government should also pay interest to marketers on delayed payment of subsidy because agreement stipulating 45 days was signed to that effect,” he said.
A spokesman of the Ministry of Finance, Mr. Paul Nwabuikwu, had said the ministry and the Central Bank of Nigeria (CBN) were collaborating to exclude fake marketers, which he claimed still explored loopholes in the system. He blamed the delays in the payment of subsidy on the detailed scrutiny of the claims.
Information from This Day was used in this report.