Fuel subsidy: Marketers groan over unpaid N156.5b claims, say arrears might affect supply in yuletide season
The petroleum products importers operating under the Petroleum Support Fund (PSF) Scheme have cried out over the alleged prolonged delay in the payment of their outstanding subsidy claims amounting to billions of naira.
According to a report by the Technical Working Committee of Stakeholders on Delayed Payment Of PSF Subsidy Claims of Marketers, which was exclusively obtained by THE CITIZEN, it stated that as at October 10, 2013, the sum of N156,542,528,180.80 is been owed marketers for 2011, 2012 and 2013 discharges.
The report further stated that the outstanding amount accumulated due to delays in the payment of verified claims, mounting bank interests and FOREX differentials.
'The interest rate regime provided for financing in the Petroleum Products Pricing Regulatory Agency (PPPRA) template is indexed to the 45 days payment cycle in the PSF Agreements. Consequently, marketers are debited by their banks on additional days of non-payment of subsidy refunds which is usually a minimum of 22% and can go as high as 25%. This results to huge exposures of the marketers on transactions carried out,' it said.
According the report, the prevailing reality is that the essence of the sovereign instruments has been defeated by the prolonged delay in payment of marketers' claims.
'The unfortunate reality today is that the Sovereign Debt Notes (SDNs) which are supposed to be redeemed immediately upon maturity now stay unredeemed for an additional 21 days or more. Out of the 271 transactions for marketers in 2013 for instance, 132 are yet to be paid; while indebtedness range from 50 days to 200 days for transactions that were funded based on a provision of 45 days' financing cost', it explained.
The report further stated that the marketers demanded the immediate payment of all their outstanding arrears plus interest and forex differentials for all delayed payments.
'The 45 days credit cycle is sacrosanct and should be respected by all parties for all due debts going forward. In the interest of all parties, these issues should be resolved speedily in view of the fast approaching 4th quarter and yuletide season which are characterized by increased demand for petroleum products by Nigerians', it further stated.
The report added that considering the fact that the PSF dwells on the principle of restitution, reimbursement under the scheme on the old naira exchange rate is inimical to sustaining products supply to the system. 'This is because the marketers will be required to satisfy their foreign exchange commitments on imports using prevailing exchange rate', it said.
It should be recalled that following concerns raised by Petroleum Products importers on the protracted delay in the payment of their outstanding subsidy claims; and the demand for the urgent intervention of PPPRA on the matter, its Executive Secretary, Reginald Stanley, at a stakeholders meeting constituted a nine-member Technical Working Committee on to examine the issue and propose remedial measures.
The Technical Working Committee which is made up of operators and other stakeholders is chaired by the Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), Mr. T.O Olawore.