The Federal Government has failed to meet its obligations on petrol subsidy claims. The money has accumulated to over N500 billion, according to Thisday, and is putting pressure on the marketers and the banks.
Investigation by Thisday revealed that the administration of President Muhammadu Buhari had not made any subsidy payments. The last time marketers were paid was in March 2015 and that was for deliveries made in October 2014.
The paper’s investigations at the Ministry of Finance revealed that the main reason for non-payment of subsidy claims was the massive reduction in government revenues as a result of the slump in oil prices and the belief by the Buhari government that there was still a large amount of waste in the administration of the subsidy payments.
“This long period of non-payment is a real threat to the health of the financial system, the companies involved in petroleum products importation and to whom subsidy payments are owed and the sustenance of uninterrupted and stable supply of petroleum products to the country,” a marketer who declined to be mentioned said.
The CEO of a major oil marketing company was also quoted to have said: “The government is putting companies in a position where they will fail because it is not meeting its obligation. We are keeping a subsidy system that we obviously have difficulty maintaining and which we are maintaining at the expense of the operators. The issue is that these operators are now dying. This could lead to another round of defaults in the banking sector and a devastation of the downstream marketing sector.”
The unnamed CEO argued sanity and legality and due process had returned to the scheme in the last two years.
Thisday quoted another oil marketer to have said: “Any notion that payments are being withheld for reason of corruption and fraud are a mere excuse to cover the real issue of a cash crunch.”