Fuel scarcity looms as FG delays subsidy payment

Written by Tunde Dodondawa, Lagos Tuesday, 29 May 2012

THERE are strong indications that fuel scarcity may soon hit the country if the Federal Government does not resume payment of arrears of fuel subsidy for 2011, which also covers the first quarter of 2012.
 
The Ministry of Finance had been ordered to defer payments of subsidy arrears to marketers, insisting that payment for 2012 subsidy should commence immediately to avoid fuel crisis, pending the resolution of the issue of 2011 arrears.
 
The issue of unpaid subsidy arrears for 2011 was as a result of the recommendation of the ad hoc committee probing the fuel subsidy management that some marketers should be forced to refund certain amounts of money illegally received to the government coffers.
 
A member of the Technical Committee on Fuel Subsidy Management, who pleaded anonymity, informed Nigerian Tribune on Monday that the committee chairman, Mr Aigboje Aig-Imoukhuede, had called for an emergency meeting, which will be held on Wednesday (tomorrow) to discuss issues raised by the finance ministry and ensure efforts of the Federal Government to sustain availability of petroleum products were not jeopardised.
 
According to him, “It was true that the directive of the finance ministry to suspend payment of subsidy arrears has attracted reactions from marketers, who also threatened to suspend importation unless all outstanding debts are paid. These marketers obtained loan facilities from commercial institutions to procure these products, further delay in such payment may result in higher interests on those facilities. The chairman (Aig-Imoukhuede) has summoned an emergency meeting to verify the authenticity or otherwise of the claims by the Finance Ministry and to make necessary approval in order to prevent crisis. I can assure you that everything will be resolved soon,” he said.
 
When asked how soon this would be resolved, he said: “I cannot be specific but it will be resolved soon.”
 
However, both the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Product Pricing Regulatory Agency (PPPRA) kicked against the decision to suspend payment of subsidy by the Ministry of Finance. The Group General Manager, Public Affairs, NNPC, Dr Levi Ajuonuma, argued that the decision could plunge the country into another round of fuel crisis, because the finance ministry had based its fuel subsidy projection for 2012 at 19 million litres daily, instead of the actual figure of over 33 million litres.
 
According to Ajuonuma, “the Ministry of Finance is about to plunge the country into fuel crisis by misleading the government on the daily consumption of petrol. I want you to alert the nation that the Federal Ministry of Finance is about to plunge this country into fuel crisis and when this crisis starts, we know whom to hold. How can anybody say that Nigeria, with a population of 167 million, consumes 19 million litres of PMS daily?
 
“The Ministry of Finance made provision for subsidy based on 19 million litres pay day, instead of over 33 million litres, which the country is consuming. So, within four months into the year, they have exhausted the money budgeted for subsidy but instead of going to Mr President to apologise for their mistake, they are looking for whom to blame. If anybody hides his head in the sand and play the ostrich, the person will have himself to blame at the end of the day,” he said.
 
Ajuonuma stated that the Ministry of Finance had no right to deny anybody, who genuinely imported fuel in 2011 his claims, especially when his documents had been duly verified.
 
“There are ways of verifying arrears and once they are genuine, the Ministry of Finance must pay. They cannot deny the NNPC or marketers their genuine claims. The Federal Ministry of Finance must pay genuine businessmen and women whose papers have passed the tests. Are they not aware that nobody is bringing products into this country? The day this crisis will start, we know whom to hold,” he warned.