Speculation that prudence in subsidy payments will cause fuel scarcity wrong
The Federal Ministry of Finance 29th May explained that subsidy payment will only be made to marketers whose claims of fuel importation have been verified as genuine. This followed wide speculations that prudence in subsidy payments will cause fuel scarcity.
According to the minister, Dr. Ngozi Okonjo-Iweala, the huge amount paid as subsidy arrears since the beginning of the year had mandated the Ministry to ensure that payments are done in a prudent and transparent manner.
In a release signed by Paul Nwabuikwu, Senior Special Assistant to the Coordinating Minster for the Economy and Minister of Finance, the minister said that based on the Petroleum Products Pricing Regulatory Agency, PPPRA and the Nigerian National Petroleum Corporation, NNPC, claims, N451bn out of the N888bn budgeted for subsidy in 2012 had been spent on arrears of 2011. This is against the N232bn 2011 arrears estimate initially put forward by the NNPC/PPPRA.
She said: “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. This is clearly not sustainable and the Ministry has a responsibility to ensure that the lapses that may have led to this unhealthy situation are not repeated. That is the least that the Ministry owes the Nigerian people.”
According to her, the Ministry is determined to put in place a strong framework for the fuel subsidy regime that is both transparent and sustainable.
“The ministry's approach to improving the subsidy regime is predicated on the following core objectives: 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 Performing its functions in an efficient and proactive manner to ensure that Nigerians get fuel at the right time and at the right price.
Okonjo Iweala said the next meeting of the Federal Accounts Allocation Committee in June will provide the occasion for resumption of payments.
