Fuel subsidy: Major fuel crisis imminent as FG’s ‘cheques bounce’ at CBN

by Isi Esene

Another storm might be brewing with regards fuel subsidy payment to oil marketers as most of them were reportedly turned back while making attempts to claim funds after importing fuel products into the country.

It appears that three weeks after the National Assembly approved a N161.6bn supplementary budget for payment of fuel subsidy for 2012, the subsidy account with the Central Bank of Nigeria (CBN) is yet to be backed by cash by the ministry of finance, led by Dr. Ngozi Okonjo-Iweala.

Marketers had approached the CBN with Sovereign Debt Notes (SDN) from the Debt Management Office (DMO) but were turned back by the CBN.

According to sources, the Federal Government normally issues oil marketers with SDNs as  security against any delay in payment of subsidy for imported cargoes.

SDN, which is another name for government borrowing, is like Treasury Bills and can be discounted for cash, though while the former is a short-term borrowing, the latter is for long term.

The issuance of the SDNs by the DMO, it was learnt, was to allow the CBN quickly fund the marketers’ accounts with their respective Deposit Money Banks.

A marketer who spoke to reporters on the condition of anonymity said, “There might be another round of scarcity because most of us are still being owed by the Federal Government.

“This is because the subsidy account in the CBN has not been credited. When the supplementary budget was passed, the Ministry of Finance said they are going to pay us so they asked the DMO to issue us with SDNs. This is a note that would enable the CBN to credit our accounts with commercial banks.

“We took it to the CBN but we were surprised at what happened. They told us that the subsidy account has not been credited because the N161bn has not been converted to cash by the Ministry of Finance.

“It is the Minister of Finance that usually tells the Accountant General of the Federation to fund the account; but as I speak to you, this has not been done. So we are still being owed.”

In its reaction, the director, corporate communications department of the CBN, Ugochukwu Okoroafor reportedly said the issue of fuel subsidy payment was the role of the Ministry of Finance and not that of the bank.

“It is not our responsibility. Our own job is that of a banker and customer relationship and that confidentiality must be respected. Let them (marketers) check with the Ministry of Finance,” he advised.

The special assistant on communications to the finance minister, Okonjo-Iweala, Paul Nwabuikwu, could not be reached to get the reaction of the ministry.

President Goodluck Jonathan had on December 11 sent a request to the National Assembly to approve an additional N161.6bn to ensure steady supply of petroleum products during the festive season.

The development had reportedly brought a relief to oil marketers who had not been able to import petroleum products owing to the huge debt burden from the Federal Government.

There had been fuel queues developing in major cities of the country during the Yuletide season but the Petroleum Products Marketing Company (PPMC) had attributed it to panic buying as well as a fire outbreak at Ijeododo, Lagos.

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