petroleum products over N220 billion claims
under the Petroleum Support Fund, PSF.
As a result, the marketers said they may not be able to adequately supply products during the Yuletide season unless the debts are cleared.
The Executive Secretary of Major Oil Marketers Association of Nigeria (MOMAN), Mr Obafemi Olawore, told Vanguard that they are being owed "mainly this year's imports plus interest charges and fixed fluctuations."
He also said that the outstanding subsidy pay increased as a result of delay in the payment of verified claims and principal sum, unbearable bank interest rate and foreign exchange differentials.
According to him, the development has put
importers at cross roads as they do not have
money to continually import petroleum products for the consumption of Nigerians.
Olawore further warned that the development
may launch the country into another round of
fuel scarcity if nothing is done to offset the outstanding claims of the marketers.
He wondered why marketers are being owed such huge amount despite their efforts in ensuring that the country is not in short supply of petroleum products.
The Federal government had recently established a Technical Working Committee of Stakeholders on Delayed Payment of PSF Subsidy Claims of Marketers, to quicken
the payment of subsidy to importers.
The Committee's recent report said the
interest rate regime provided for financing in the Petroleum Products Pricing Regulatory
Agency (PPPRA) template is indexed to the 45
days payment cycle in the PSF Agreements.
It stated that marketers are debited by their banks on additional days of non-payment of subsidy refunds which is usually a minimum of 22 percent and can go as high as 25 percent.
This, it said, resulted in huge exposures of
the marketers on transactions carried out.
The report said the prevailing reality is that the essence of the sovereign instruments has been defeated by the prolonged delay in payment of marketers' claims.
The unfortunate reality today is that the Sovereign Debt Notes (SDNs) which are supposed to be redeemed immediately upon maturity now stay unredeemed for an additional 21 days or more.
Out of the 271 transactions for marketers in 2013 for instance, 132 are yet to be paid; while indebtedness range from 50 days to 200 days for transactions that were funded based on a provision of 45 days' financing cost."
The report also stated that marketers demanded the immediate payment of all their outstanding arrears plus interest and forex differentials for all delayed payments.
According to the report, "The 45 days credit
cycle is sacrosanct and should be respected by all parties for all due debts going forward.
In the interest of all parties, these issues
should be resolved speedily in view of the
fast approaching fourth quarter and yuletide
season which are characterized by increased
demand for petroleum products by Nigerians".
The report stated that given the fact that the PSF dwells on the principle of restitution, reimbursement under the scheme on the old naira exchange rate is inimical to sustaining products supply to the system.
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