Presidency wades into unpaid subsidy palaver
By Yemie Adeoye
THERE are indications that the Presidency may have decided to wade into the controversy surrounding the Petroleum Subsidy Fund, PSF, overseen by the Ministry of Finance in the wake of allegations of massive fraud which bedeviled the scheme.
The move is informed by the possibility of petroleum products scarcity of immense magnitude in the Yuletide, if monies owed Nigerian National Petroleum Corporation, NNPC, and private oil marketers are not paid.
NNPC, at the moment, has almost become the sole importer of products, against previous arrangements where private marketers were responsible for 90 percent of products distribution nationwide.
Vanguard reliably gathered that the President was caught between ensuring that due process was followed, no matter how long it took, and seeing Nigerians suffer scarcity during the holidays or civil unrest as queues resurfaced in fuel stations across major cities in the country.
A presidency source, who spoke to Vanguard on condition of anonymity, explained that President Jonathan was also in support of a hard-line stance against marketers, who might have defrauded the system under the PSF scheme.
The source said the Ministry of Finance might be directed anytime soon to ensure a speedy payment process to all marketers, who still have legitimate subsidy claims and have not been indicted by the Aig Imokhuede Committee.
According to the source, “the seeming face-off between two ministries over unpaid claims is unnecessary as they are all working for the interest of the government.
“I think in the end what takes precedence to Mr. President is the comfort of all Nigerians, especially at this Yuletide period and going forward.”
When contacted, Secretary-General of the Major Oil Marketers Association of Nigeria, MOMAN, Mr. Obafemi Olawore, said: “If the Ministry of Finance was waiting for the Imoukhuede Committee report and it has been submitted, then those not indicted should be paid immediately, and NNPC should also make it clear that they alone cannot service the entire country.
“If they pay NNPC and the remaining marketers are not paid, there would still be queues so the Presidency should simply ensure that the finance ministry pays everyone that has a legitimate claim to make.
“There have been no importation due to the huge debts owed oil marketers and the NNPC had been saddled with the task of over 85 percent of total importation, while 15 percent goes to marketers.
“It is, however, important to note that there has been instances where marketers have been responsible for 60 percent of imported products and the NNPC had 40 percent and now it is 85 to 15 percent.”
Mr. Olawore stated further that it was important for the debt of about N120 to N140 billion to be paid this week if the government was serious about ensuring a scarcity-free yuletide for all Nigerians.
According to him, it won’t take less than two weeks to land a vessel in the country, hence if payments were made to marketers this week, they could make their order and products will be arriving the country from the second week of December when the holiday season would be at its peak.
He noted further that the problems of the marketers had been the interest rates from the banks, which he puts at 22 percent and which according to him, is “killing the marketers” as the banks were no longer lending, in view of the huge debt which government was not settling.
In a swift response, however, the Co-coordinating Minister for the Economy and Finance, Dr. Ngozi Okonjo-Iweala, stated that payments of all marketers legitimately owed was currently ongoing.
She added that the Ministry was not unaware that the Yuletide season needed to be taken care of and would do all it could to ensure that Nigerians didn’t face any hardship as a result of non-payment of subsidy during the period.
The minister, who spoke to Vanguard through her media aide, Mr. Paul Nwabuiko, observed that the subsidy payment regime had two clear objectives: to ensure that the mistakes of the past did not repeat themselves and also to ensure that those that had not done the right were not be paid.
She said: “We are not in a blind hurry about this payment and something would be done to ensure that yuletide is not hard on Nigerians as a result of this.
“However, it is important to note that we cannot afford to ignore the fact that a quarter of the national budget is being consumed by this subsidy scheme, hence it is highly imperative that it be done in the proper way and only those who have legitimate claims should have access to the funds.
“The regime is now tighter as it is no longer business as usual. That is simply what has happened and it is of essence that we get to this stage.
“What has happened now is that the Ministry has decided that the subsidy claims be divided to three categories. Those who have done the right thing and have no case to answer with government are currently being paid as I mentioned earlier and payment is still ongoing.
“The second ones are those who still have a few things to sort out with government and the third are the ones who have issues to clarify and feel that they are too powerful to be investigated.
“These are the ones who are instigating a lot of what you see at the pumps and as a Ministry, we need to ensure things are done in the proper way to forestall what happened in January, which is still fresh in our minds.”
Speaking on the queues that seems to have resurfaced nationwide, spokesman of Pipelines and Products Marketing Company, PPMC, a subsidiary of the NNPC, Mr. Nasir Imodagbe, said there were challenges with distribution.
He, however, added that there was no problem with importation as NNPC had about 20 vessels awaiting discharge at the Lagos ports, and that there was over 32 days’ supply for the entire country.
According to him, there should be no reason for panic buying, which is what is currently being experienced. He appealed for patience, saying the queues were absolutely unnecessary.
On the collapse of the nation’s most strategic pipeline network, System 2b, Imodagbe said a survey report on the line confirmed about 190 vandalised points.
He added that while the report was being studied, it was observed that 10 new vandalised points had been established just last week, bringing the points to 190.
He said: “We are working on System 2b, even in the face of intense security challenges and hope to bring it back to life in the shortest possible time.
“However, we have as a result of this development, commenced massive bridging of petroleum products across the country by partnering with private depot operators like NIPCO, Folawiyo, etc.
“We’re loading massively round the clock from all these points and have recently engaged four new depots also to shore up distribution and supply, especially with the collapse of our System 2b and the closure of Capital Oil and Gas Ltd.
“We are aware that NNPC alone cannot solve the distribution problem of the entire country but we have taken up our responsibility as the supplier of the last resort by ensuring that there is no vacuum and the nation does not lack products as a result of the problems being faced by marketers over unpaid subsidy claim.”
He also urged the government to speed up NNPC payments as there was a financial ceiling to the corporations operations, which might be affected as the banks were no longer lending for products importation.