Oil Marketers to get N198 billion Subsidy Payment

Crude oil
Crude oil
Share this story

The 8th session of the House of Representatives formally winded down its activities on Thursday with the approval of the total sum of N198 billion final subsidy claims for oil marketers.

Breakdown of the amount approved by the Green Chamber includes payment of a total sum of N140. 823 billion to Tanzila Petroleum Company as oil subsidy claim for premium motor spirit imported in 2018.

In the same vein, the House during the Committee of the Whole chaired by the Speaker, Hon Yakubu Dogara approved the payment of the N58.120 billion to 19 oil marketing companies (OMCs) which were verified by the Committee on Aids, Loans and Debt Management chaired by Hon. Adeyinka Ajayi.

Similarly, the House approved the payment of a total sum of N129.048 billion as the final subsidy arrears claim for 67 OMCs.

This was contained in the 12-page ‘Final report on the request for the establishment of a Promissory Note Programme and a Bond Issuance to settle inherited local debts and contractual obligations’, considered by the House before embarking on seven-day recess.

In its findings, Hon Adeyinka explained that the Promissory Notes and Bond issuance was meant to clear unpaid debts which the Federal Government is indebted to various sectors of the economy.

According to the him, “outstanding claims and liabilities which form component of the unpaid debts are both recurrent and capital expenditures” which include: unpaid obligations to pensioners, unpaid salaries and Third party deductions, Staff claims from the office of the Head of Civil Service of the Federation, Ex-Nigerian Airways staff claims, Refund to State Governments for projects executed on behalf of the Federal Government, Major Contractors debts, Contractors and Suppliers debts, Export Expansion Grant liabilities, Subsidy arrears, interest accrued and foreign exchange differentials, Ministry of Health Outsourced liabilities, Judgement Debts and DISCOs/GENCOS debts.

Read This:  Banks stop use of Naira debit cards for International transactions

He explained that the accrued interest was based on the Service Level Agreement (SLA) under the Petroleum Support Fund (SPF) scheme in which government is to pay all liabilities (interest and forex differentials) arising from non-settlement of subsidies within the agreed timeframe of 45 days.

According to him, ” due to delay in payments and subsequent scarcity of forex as at the time of LCs liquidation, the commercial banks exchange rate was higher than the CBN rate and therefore should be used as the benchmarks for the arrears computation and since government could not meet up with the cut-off date 30th June 2017, the banks continued accumulating interest on the claims and as such, the attracted additional charges should be paid”.

The Committee further observed that the total amount verified and sent to Federal Government is in the sum of N429,054,203,228 while the Marketers claim is N670,497,543,158.62 only as at 30th June 2017.

According to him, “Federal Ministry of Finance upon receipt of PPPRA’s verified figures sought and obtained approval of FEC to pay the sum of N429,054,203,228 as the final figure due to OMCs as at 30th June 2017.

“Federal Ministry of Finance indicates that the verified figures in respect of 19 OMCs were either higher or very close to their claims while those of OMCs with higher claims got lesser figures.

The House formally adjourned plenary till next week and all the members of the 8th session are expected to converge on Thursday, 6th June 2019 for the valedictory session.

The session is to be chaired by Speaker Yakubu Dogara and other dignitaries including past Principal Officers of the House of Representatives, among others.


Share this story

Post your comments below

Loading...