FG approves N413bn for oil marketers as Subsidy Claims

The federal government has approved the immediate payment of N413 billion to oil marketers as outstanding payment for subsidy claims.
 This is the first subsidy payment to be made by the Buhari administration after subsidy backlog inherited from the former government had climbed in excess of N300bn and with fuel scarcity already hitting many states.

 The Nigeria National Petroleum Corporation (NNPC), in a statement yesterday by its spokesman, Ohi Alegbe, said the payment was part of measures to eliminate the noticeable fuel queues across some major cities in the country.
 “It is our belief that with the outstanding payment due to oil marketers now assured, the marketers and other downstream players will join hands with the NNPC to guarantee that the nation remains wet with petroleum products all year round,’’ the Corporation said.


 It also said it has injected additional volumes of petrol to enrich product availability in the affected states.
 Oil marketers had, in June this year, said they were still being owed over N291bn subsidy claims.

 At a time, only the NNPC was said to be importing petrol because members of the Major Oil Marketers Association of Nigeria (MOMAN) had refused to import owing to subsidy arrears owed them by the federal government.
 MOMAN Executive Secretary, Obafemi Lawore, could not be reached when contacted on the latest N413bn approval for its members.

Muhammadu Buhari shortly after he won the presidential election advised him to end the fuel subsidy programme and privatise the nation’s four refineries.
 “I have received ... literature on the need to remove subsidies, but much of it has no depth,” Buhari had said.

 Some analysts say the recent approval may be an indication that the president has finally made up his mind to retain fuel subsidy.
 A professor of Energy Economics, Prof. Adeola Adenikinju said it is high time the government came out with a long-term policy that will address this issue once and for all so that Nigerians will know that there is a road map.
 “The President himself has said that subsidy is the only benefit Nigerians are getting, so he seems reluctant to remove subsidy. As long as you have this kind of signal, subsidy will continue. We don’t even have money now; government is complaining about no money, yet you are still paying huge subsidy to these marketers,” he said.

 The Nigeria Programme Coordinator for the Natural Resource Governance Institute, Dauda Garuba said what the government has done is paying debt that it owed marketers and does not in any way represent a policy statement on what to do with subsidy.

 However, he said, “I strongly feel the Buhari administration needs to engage the Nigerian public on what to do with subsidy across the board. Countries are either dropping or rejigging subsidy.”
 Head of Research at Ecobank, Dolapo Oni said the government had no option but pay the debts, “but the question is: where is the money going to come from? The budget for this year only had N145bn for subsidy. So far, with this payment we would have spent close to N700bn now.”