Unpaid Subsidy: NNPC Alerts Jonathan Of Looming Crisis

Unpaid Subsidy: NNPC Alerts Jonathan Of Looming Crisis

The Nigerian National Petroleum Corporation has alerted President Goodluck Jonathan to a looming acute fuel shortage if the Federal Government fails to pay N1.13trn subsidy owed it (NNPC).

The NNPC top management, led by the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, and the corporation’s Group Managing Director, Mr. Andrew Yakubu, reportedly made this known to Jonathan at a recent meeting.

Our correspondent learnt that team told the President  that  the Minister of Finance, Mrs. Ngozi Okonjo-Iweala,  had  failed to pay the  debt.

 At the meeting, the corporation was said to have hinged its capacity to continue the importation of fuel on the payment of the debt  which had accumulated over the months.

The NNPC, The PUNCH learnt, told the President that fuel might disappear from filling stations across the country if  government  failed to pay the debt. This is in addition to the fear that the N971bn subsidy provision in the 2013 budget is seen as grossly inadequate.

“Yes, we have made a presentation to the President. We are waiting for his response because it (payment of the subsidy claim) is very imperative for our capacity to import fuel ,” a source at the NNPC, who was privy to discussion at the meeting told  one of our correspondents.

Alison-Madueke and the NNPC management were said to have requested for the meeting with the President after their failed attempts to make Okonjo-Iweala pay the subsidy claim.

The corporation has remained the only importer of fuel since the controversy  over the payment of subsidy claims to importers commenced. Oil marketers have refused to import the product because the government has  declined  to pay  some claims which the government  described as  spurious.

Attempts to speak with  the NNPC Acting Group General Manager, Public Affairs , Mr. Fidel Pepple, on the meeting with the President proved abortive as he  did not answer his telephone  calls. He also failed to respond to text messages sent to his phone on the matter.

However, Pepple in June had confirmed in an interview with Reuters that the organisation owed N1.13trn in subsidy arrears.

He had said, “As at the end of May 2012, NNPC had unpaid claims of N1.134trn.

“We are concerned about the shortages but just to put it on record, NNPC has been the only organisation importing products since January when the fuel subsidy issue began.”

Okonjo-Iweala’s Senior Special Assistant on Communications, Mr. Paul Nwabuikwu, did not pick his call either. He also did not respond to a text message sent to his mobile phone on why the ministry had not paid the  subsidy claims.

Oil marketers under the Jetty and Petroleum Tank Farm Owners have however  faulted the N971bn budgeted for the subsidy in the 2013 fiscal year.

The group said the amount would not be enough to guarantee adequate supply of petroleum products.

The Executive Secretary, JEPTFON, Mr. Enoch Kenawa, said this during a telephone interview with one of  our correspondents. 

He said, “It (N971bn) will not be adequate. What the government is doing is putting Nigerians in double jeopardy. They said they are subsidising fuel, yet people can’t see the products to buy and where they have fuel, people still pay very high to get it.

 “The N971bn for fuel subsidy can never be adequate. At 35 million litres of fuel consumption per day, the money can’t be enough.”

He said rather than N971bn, the government should have provided for between N1.2trn and N1.5trn, based on  the current consumption pattern.

  “If they want to remove, let them remove it (subsidy) instead of what they are doing right now. Based on the demand, the amount that would be reasonable for fuel subsidy should be between N1.2trn and N1.5trn,”Kenawa added.

 He attributed the fuel scarcity in many parts of the country to the N888bn voted for subsidy this year, which was not enough.

 The Federal Government had in January announced the total removal of subsidy on petrol and consequently hiked the pump price of the product from N65 to N141.

 The government, however, reduced the price to N97 following mass protests organised by labour unions and civil society groups.

 The  protest also inspired the House of Representatives to institute a probe into the subsidy regime. The committee headed by Mr. Farouk Lawan had found widespread abuse of the subsidy regime. The committee’s report indicated that the country had been short-changed to the tune of N1.7trn under the subsidy regime.

 Although the report was tainted by allegations of bribery against Lawan by an oil marketer, Femi Otedola, the Economic and Financial Crimes Commission has started the prosecution of some of the oil marketers indicted by the report.

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