A Review of the Nigerian Energy Industry

Nigeria says only verified marketers will be paid subsidy claims

30 May 2012, Sweetcrude, ABUJA – The Nigerian government says it would henceforth only pay fuel subsidy claims to verified oil marketers as it moves further to entrench accountability in its fuel import regime.

Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, disclosed this on Tuesday.

She stated that while her ministry would be ready to work with relevant agencies for the common good of Nigerians, it would not be stampeded into making hasty payments on fuel deliveries that had not been substantiated or verified.

In a statement by her Senior Special Assistant, Mr. Paul Nwabuikwu, the minister noted that in line with this focus, her ministry would continue to pay all marketers whose claims of fuel importation had been verified as genuine.

The minister also allayed fears of possible fuel scarcity in the country, saying that speculation that prudence in subsidy payments would cause fuel scarcity was wrong.

“Indeed, to say that the Ministry’s efforts to learn lessons from the past and reform the way payments are made will lead to fuel scarcity is simply not the case,” she said.

She disclosed that based on PPPRA and NNPC’s claims, N451 billion of the N888 billion subsidy budget for 2012 had already been spent on arrears for 2011.

“Since the NNPC/PPPRA’s estimate for the 2011 arrears was N232 billion, this means that more than double the projected amount has already been spent and those agencies are still bringing in more claims,” she said.

She said this is clearly not sustainable, adding that her ministry has a responsibility to ensure that the lapses that may have led to this unhealthy situation are not repeated.

The minister stated that in line with the directive of the President, the ministry will continue to work towards the improvement of the fuel subsidy regime based on the lessons learnt from recent experiences.

The ministry is determined to put in place a strong framework for the fuel subsidy regime that is both transparent and sustainable, she explained.

She stated that the “ministry’s approach to improving the subsidy regime is predicated on ensuring that the country’s finances are managed in a manner that clearly protects the interests of the Nigerian people; putting in place a system that ensures that only the genuine claims of genuine
marketers are honoured and also performing its functions in an efficient and proactive manner to ensure that Nigerians get fuel at the right time and at the right price”.

The NNPC had earlier raised the alarm that the Ministry of Finance was about to plunge the country into fuel crisis, by providing in the 2012 budget, fuel subsidy based on the daily consumption figure of 19 million litres, instead of the actual figure of over 33million litres that the ministry gave to the Federal Government.

But the ministry insisted that the issue of underestimation did not arise because the NNPC and PPPRA which had the responsibility did not provide any basis for estimation of consumption.

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