The marketers of petroleum products will in December cash N237 billion, being the first tranche of the N800 billion outstanding subsidy claims, which promissory notes were issued to them last December by the federal government.
The Executive Secretary of Major Oil Marketers Association of Nigeria, Mr. Clement Isong, who disclosed this to journalists in Lagos Wednesday, added that reconciliation is going on between the individual marketing companies, the Petroleum Products Pricing Regulatory Agency (PPPRA), taking into cognisance the feasibility of the order by the Central Bank of Nigeria (CBN) that all interest payment made on the loans be reversed from July 1, 2017.
Isong said they were hopeful of being paid their money as reconciliation is also going on for the second tranche of the payment.
“The amount on the promissory note that was issued was N237 billion. It is a bit difficult to tell you the percentage. Part of the agreement was that the Central Bank asked commercial banks to freeze interest rates from July 1, 2017 leading to about 18 months. So the interest payment for that 18-month period is to be reversed.
“So, the subsidy that was about 800 billion will go significantly backward, as a result of that reconciliations are ongoing between the individual marketers, the PPPRA and banks to determine the N237 that was paid which was the first tranche. But also, for the second tranche, which is expected to be paid reconciliations are ongoing between our marketers, PPPRA and banks so that we know how much our marketers spent.
“There is also the deduction of forex differentials; reconciliations are also being made to identify what actual forex payment will be made. So, there is a lot of work, reconciliation is going on. We are extremely hopeful that this matter will be put to bed as soon as possible; people will be paid to overcome this traumatic situation.
He added: “Remember that the first payment was promissory note which is expected to mature by December this year; so, it’s not even cash. We had hoped that we would finish the reconciliation last year but we are still pushing the reconciliation. Left to us, we would have been paid by now. The banks are waiting for the Central Bank to confirm that decision of reversion. Once that is done, then, hopefully we will be paid.”
However, Isong advised the government to find a way of stopping subsidy payment on petroleum products, saying it is not good for the country.
Also speaking, the new Chairman of MOMAN and Chief Executive Officer of 11Plc (formerly Mobil Oil Nigeria Plc), Mr. Adenjunji Oyebanji, argued that for the Nigerian petroleum industry to flourish like its counterparts, it has to be deregulated to enable people invest in the sector and be sure of making returns on their investments.
“Then, we should also at that stage to begin planning for the future; what is going to happen? What is going to be the place of renewable in the industry? Are we going to bring in ethanol in the equation or other plant-based fuel options? What about solar-powered vehicles?
What about gas-powered vehicles? These are all options that are available, that are just there that we can explore,” he added.