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Fresh Subsidy Claims Accumulate over Budget Delays

18 Feb 2013

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National Assembly


By Ejiofor Alike

As the National Assembly and the Executive bicker over the passage of the 2013 budget, there may be no end in sight for the crisis that hit the downstream sector of the oil and gas industry in 2012, which was caused by delays in payment of subsidy, THISDAY has learnt.
THISDAY gathered during the weekend that fresh subsidy bills had started to accumulate without any clear indication that they would be paid soon, due to the delay in the passage of the 2013 budget.
The Petroleum Support Fund (PSF) guidelines under which petrol subsidy is administered provide that the marketers should be paid subsidy within 45 days of importation of a cargo.


It was learnt that some marketers who were given allocations and import permits by the Petroleum Products Pricing Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR), respectively, by the end of 2012 to import fuel for the first quarter of 2013 have submitted claims for payment of subsidy.
THISDAY gathered that most of the companies given allocations have started importing and submitting claims but none of them has received payment due to the non-passage of the budget.


One of the marketers told THISDAY that his company was yet to be paid all the claims it submitted for 2012.
“Some of our 2012 claims are still outstanding and we have submitted claims for two cargoes this year. The guidelines stipulate that immediately your cargoes are confirmed, you will be paid within 45 days. Our first cargo arrived at the middle of last month but we have not been paid,” he said.


A source in PPPRA told THISDAY that the marketers would not receive payment for 2013 claims until the budget is passed. He however noted that only few marketers had submitted claims for 2013.


“They don’t submit claims after the arrival of every cargo. It is after they bring in two or three cargoes that they submit claims,” he said.
The various subsidy probes conducted in 2012 effectively stalled payment of subsidy claims for several months, resulting in protracted fuel crisis. The PPPRA in December 2012 gave 32 companies allocations to import petrol in the first quarter of this year.


The companies include Nigerian National Petroleum Corporation (NNPC), Aiteo Energy, Ascon Oil, Avidor Oil and Gas, A-Z Petroleum, Bovas, Conoil Plc, Dee Jones Petroleum and Gas, Dozzy Oil and Gas, Folawiyo Energy, Fresh Synergy Ltd and Forte Oil Plc.


Others include First Deepwater Discovery Ltd, Gulf Treasure Ltd, Heyden Petroleum, Ibafon Oil Ltd, Integrated Oil and Gas Industries, IPMAN Refining and Marketing Ltd, Mobil Oil Plc, MRS Oil & Gas Ltd, MRS Oil Nig. Plc, NIPCO Plc, Northwest Petroleum & Gas Ltd, Oando Plc, Obat Petroleum Ltd, RainOil Ltd, Rahamaniyya Oil Gas and Sahara Energy Ltd.


Shorelink Oil Ltd, Swift Oil Ltd, Techno Oil Ltd and Total Nigeria Plc were also among the companies permitted to import fuel for 

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