SUBSIDY CLAIMS: FG pays marketers N338.24bn in 2012

By Clara Nwachukwu
LAGOS—In defence of claims by oil marketing and trading companies, OM&TCs that the Sovereign Debt Notes, SDNs, given to them as reimbursement for petroleum products importated are not backed by cash, the Federal Ministry of Finance said it has paid about N338.24billion as at August 22, 2012.

The Ministry in statistics made available to Vanguard, yesterday, titled: “Update on Payments to Oil Marketers Whose Claims Have Been Verified”, said that a whopping sum of N259.34billion were paid the OM&TCs as subsidy arrears for 2011, while about N78.9billion have been paid for 2012 verified claims.

YOU WIN—From left: Minister of Women Affairs, Hajia Zainab Maina; Vice President, Namadi Sambo; President Goodluck Jonathan and Minister of Finance, Mrs. Ngozi Okonjo-Iweala during the Presidential Launch of 2nd Edition of Youth Enterprise With Innovation In Nigeria (You Win), yesterday, at the State House, Abuja.

“Please note that of the total amount of N78.9 billion paid so far under this category, N34.6billion was paid on Wednesday, August 22, 2012 following a thorough process of claims verification. This is in line with the commitment of the Federal Ministry of Finance to continue the payment of marketers whose papers have been processed and cleared,” the update read in part.

It further observed that, “some claims were settled before substantive implementation of the Aig-Imoukuede Committee’s Report, which led to the suspension of payments of all 2012 claims to oil marketers under investigation for serious infractions.”

Banks are not funding importation

However, some of the marketers who spoke in confidence toVanguard, complained that the invalidity of the SNDs has made it impossible for them to continue to import products, as “no bank is willing to finance the importation of new cargoes,” thus heightening the fears of impending fuel scarcity.

The OM&TCs told Vanguard exclusively that some of them had been carrying around the debt notes for upwards of four weeks without cash back up.

“If you have the SDN and you cannot turn it into cash, then you cannot import products because banks are not willing to finance it. So as it is two things will happen: scarcity will set in because most of the existing stocks have been exhausted, and scarcity will naturally lead to nationwide strikes,” they opined.

The development raises questions about Nigeria’s liquidity if its debit notes are no longer cashable, even as Finance Minister/Coordinator of the Economy put foreign reserves in excess of $38billion

But in a quick response to Vanguard’s inquiry, the Finance Ministry released the names of the OM&TCs, whose claims had been verified and paid accordingly.

List of marketers paid

It would be recalled that Vanguard had earlier exclusively reported that the marketers had dared the ministry to publish the names of those that have been paid. Apparently pushed to the limit in view of the claims and counter claims that have tried the subsidy hoax, the ministry is being forced to call their bluff, to state as follows:

Please note that the Federal Ministry of Finance makes payments based on submitted batches by the Petroleum Products Pricing Regulatory Agency (PPPRA).

LATEST PAYMENTS MADE BY THE FEDERAL MINISTRY OF FINANCE TO OIL MARKETERS IN 2012 AGAINST 2012 CLAIMS

NO. OF COMPANIES: 24

NO. OF CLAIMS: 43

S/NO.

NAME OF OIL MARKETER

1.ASCON OIL COMPANY LIMITED (3 Claims)
2.BODEJ INVESTMENT LIMITED (1 Claim)
3. BOVAS AND COMPANY LIMITED (2 Claims)
4.CHANNEL OIL AND PETROLEUM LIMITED (1 Claim)
5.DEE JONES PETROLEUM AND GAS LIMITED (1 Claim)
6. DOZZY OIL AND GAS LIMITED (1 Claim)
7.FIRST DEEP WATER DISCOVERY LTD (1 Claim)
8. FOLAWIYO ENERGY LIMITED (1 Claim)
9.HEYDEN PETROLEUM LIMITED (1 Claim)
10.HONEYWELL OIL & GAS LIMITED (1 Claim)
11.INTEGRATED OIL & GAS (1 Claim)
12.MASTERS ENERGY OIL AND GAS LTD (1 Claim)
13.MOBIL OIL NIGERIA NIGERIA PLC (3 Claim)
14.MRS OIL & GAS LIMITED (1 Claim)
15.NIPCO PLC (4 Claims)
16.OANDO PLC (2 Claims)
17.RAHAMANIYYA OIL & GAS (3 Claims)
18.RAIN OIL LIMITED (5 Claims)
19.SAHARA ENERGY RESOURCES LIMITED (2 Claims)
20. SHORELINK OIL AND GAS SERVICES LIMITED (2 Claims)
21. SWIFT OIL LIMITED (1 Claim)
22. TECHNO OIL LIMITED (3 Claims)

23.TOTAL NIGERIA PLC (1 Claim)

24. ZALEX ENERGY RESOURCES LIMITED (1 Claim)

Grand Total:  N78,899,342,509.65

TABLE 2:

PAYMENTS MADE BY THE FEDERAL MINISTRY  OF FINANCE TO OIL MARKETERS IN 2012 AGAINST 2011 ARREARS.

S/NO    NAME OF OIL MARKETER
1    ACORN PLC
2    AITEO ENERGY RESOURCES
3    AMG PETRO-ENERGY LIMITED
4    ANOSYKE GROUP OF COMPANIES
5    ASCON OIL COMPANY LIMITED
6    AX ENERGY LIMITED
7    A-Z PETROLEUM
8    BAYWOOD CONTINENTAL LIMITED
9    BRITANIA .U. NIGERIA LIMITED
10    CAADES OIL & GAS LIMITED
11    CAH RESOURCES ASSOCIATED LIMITED
12    CAPITAL OIL & GAS INDUSTRY LTD
13    CARNIVAL ENERGY OIL & GAS LTD
14    CEOTI LIMITED
15    CHANNEL OIL & GAS SVS
16    CONOIL PLC
17    CRUST ENERGY LIMITED
18    DEE JONES PETROLEUM & GAS LIMITED
19    DOWNSTREAM ENERGY SOURCE LTD
20    DUPORT MARINE LIMITED
21    ECO-REGEN LIMITED
22    ETERNA OIL & GAS PLC
23    EURAFIC OIL & COASTAL SERVICE  LIMITED
24    FARGO PETROLEUM & GAS LIMITED
25    FIRST DEEP WATER DISCOVERY LIMITED
26    FOLAWIYO ENERGY
27    FORTE OIL PLC
28    FRADO INTERNATIONAL LIMITED
29    FRESH SYNERGY LIMITED
30    GEACAN ENERGY LIMITED
31    HEYDEN PETROLEUM LIMITED
32    HONEYWELL OIL & GAS LIMITED
33    IBAFON OIL LIMITED
34    INTEGRATED OIL & GAS
35    KNIGHT BRIDGE OIL
36    LLYODS ENERGY LIMITED
37    LOTTOJ OIL & GAS LIMITED
38    MASTERS ENERGY OIL & GAS LIMITED
39    MATRIX ENERGY LIMITED
40    MOB INTEGRATED SERVICES
41    MOBIL OIL NIGERIA NIGERIA PLC
42    MOMATS OIL & GAS LIMITED
43    MRS OIL & GAS CO. LIMITED
44    MRS OIL NIGERIA PLC
45    MRS OIL NIGERIA PLC
46    NADABO ENERGY LIMITED
47    NASAMAN OIL SERVICES LIMITED
48    NATICEL PETROLEUM LIMTIED
49    NIPCO PLC
50    NORTHWEST PETROLEUM & GAS CO LTD
51    OAKFIELD SYNERGY NETWORK LTD
52    OANDO NIGERIA PLC
53    OBAT OIL & PETROLEUM LIMITED
54    OIL BATH NIGERIA LIMITED
55    ORIGIN OIL & GAS LIMITED
56    PETROL TRADE ENERGY LIMITED
57    PHOENIX OIL COMPANY LIMITED
58    PINNACLE CONTRACTOR LIMITED
59    PINNACLE OIL & GAS LIMITED
60    PRUDENT ENERGY & SERV. LTD
61    RAHAMANIYYA OIL & GAS LIMITED
62    RAINOIL LIMITED
63    ROCKY ENERGY LIMITED
64    RYDEN OIL LIMITED
65    SAHARA ENERGY RESOURCES LIMITED
66    SEA PETROLEUM & GAS COMPANY LTD
67    SHORELINK OIL & GAS LIMITED
68    SIFAX OIL & GAS COMPANY LIMITED
69    SIRIUS ENERGY RESOURCES LIMITED
70    SOMERSET ENERGY SERVICES LIMITED
71    TECHNO OIL LIMITED
72    TONIQUE OIL SERVICES LIMITED
73    TOP OIL & GAS DEVELOPMENT LIMITED
74    VALCORE ENERGY LIMITED
75    VENRO ENERGY LIMITED
76    VIVENDI ENERGY NIGERIA LIMITED
77    XALON PETROLEUM LIMITED
78    ZALEX ENERGY RESOURCES LIMITED
79    ZAMSON GLOBAL RESOURCES LIMITED

TOTAL AMOUNT SETTLED: N259,339,041,657.85

Processing of claims/SDNs

OM&TCs under the subsidy regime, file for claims for reimbursement of the difference between the landing costs for petrol and kerosene and the domestic pump prices.

Thereafter, the Petroleum Products Pricing Regulatory Agency, PPPRA, will verify the documents and send to the Ministry of Finance, who in turn, invites external auditors to counter-check the documents and then forward to the Debt Management Office, DMO.

The DMO, based on the auditors’ recommendations issues the Sovereign Debt Notes, which the marketers take to the Central Bank of Nigeria, CBN for cash validation through their respective banks.

However, if the debits notes cannot be turned into cash, they remain “as good as a tissue paper.”