26 June 2012

Nigeria: FG Uncovers Overpayment of N430 Billion to Fuel Marketers

The committee headed by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhuede, which was set up by the Federal Ministry of Finance to verify arrears of claims on petrol subsidy for 2011 has uncovered overpayments amounting to N430 billion to private oil marketers and importers, THISDAY has learnt.

THISDAY gathered that there were discrepancies in the amount of subsidy claims made by some of the marketers and the volume of products they imported during the period under investigation.

The committee, which will be formally submitting its report to the Minister of Finance and Coordinating Minister for Economy, Dr. Ngozi Okonjo-Iweala, today in Abuja, also discovered that some of the affected marketers included companies that did not feature in the report of the ad hoc committee of the House of Representatives that probed the administration of fuel subsidies.

When contacted by THISDAY, several members of the committee refused to comment on the content of the report.

"It will be unfair for me to comment on a report we have not submitted to the government. We concluded the report last week but the minister was outside the country. The report will be submitted this week and until that is done, I cannot comment on the content," said one of the members.

However, a source privy to their findings and recommendations told THISDAY that the marketers whose subsidy claims were established to contain discrepancies would be asked to either refund the difference to the government treasury or will not be entitled to payments for outstanding claims until they are netted off.

A presidency source confirmed that the finance ministry would try to establish a methodology on how it shall get the marketers which had been paid subsidies to which they were not entitled to, to refund the money.

"They would be compelled to either refund it to the treasury or if a marketer is discovered to have been overpaid, the amount will be netted off against any outstanding claims it might have," he said.

He explained that though the Federal Government had already spent more than 50 per cent of what was budgeted for subsidy payments in the 2012 budget on 2011 arrears, the finance ministry was not considering submitting a supplementary budget to meet its obligations for the rest of the year.

"The minister (Okonjo-Iweala) is trying to work out the methodology to plug the leaks in the system and would rather do this than submit a supplementary budget to President Goodluck Jonathan for onward delivery to the National Assembly, as this could lead to fiscal expansion and more borrowing.

"It is not in her agenda to submit a supplementary budget, as whatever method she uses to get marketers to cough up what they owe the government will lead to savings for the federation," he explained.

Of the N888 billion earmarked to subsidise petrol and kerosene in the 2012 budget, N232 billion was meant to settle the 2011 arrears.

However, the Ministry of Finance revealed recently that it had spent N451 billion of the N888 billion on the payment of arrears for 2011.

A further N17 billion was paid on 2012 subsidy claims, but the ministry suspended further payments on 2011 and 2012, pending the submission of the committee led by Aig-Imoukhuede.

With the committee concluding its findings, subsidy payments will resume next month.

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