SUBSIDY ISSUES:GOVERMENT OWES 1.134 TRILLION NNPC SAYS

NNPC) yesterday said government owes it N1.134 trillion in fuel subsidy claims as at May, debts which could wipe out excess crude savings supposed to protect the economy from oil price dips Reuters news agency reported that the Excess Crude Account (ECA), where government saves oil revenues over a benchmark price of $72 a barrel, held $6.9 billion on July 19, not enough to pay NNPC’s subsidy claims which is equivalent of $7 billion, let alone a string of other fuel importers’ debt.

“As at the end of May 2012 NNPC had unpaid (subsidy) claims of 1.134 trillion naira ($7.06 billion),” spokesman for NNPC Fidel Pepple told Reuters.

On Tuesday, Central Bank governor Sanusi Lamido Sanusi said declines in global economic growth would have serious impact on the economy, citing high government spending, worsening security problems and lower oil output.

But in spite of the risks, state governors have been putting pressure on the Federal Government to share about N320 billion from the excess crude savings, Finance Minister Ngozi Okojo-Iweala said on Tuesday.

NNPC’s latest subsidy claims came as fuel importers threatened to strike this week over unpaid subsidies amounting to billions.

The corporation said yesterday it had 46 days of fuel supplies and it would do its best to meet demand despite “limited resources.”

“Yes we are concerned about the shortages but just to put it on record NNPC has been the only organisation importing products since January when the fuel subsidy issue began,” Pepple said.

The finance ministry declined to comment to Reuters on the missed subsidy payments but has previously said it is waiting for the results of probes into fuel importers before resuming payments.

Several investigations into the fuel import subsidy were launched after President Goodluck Jonathan attempted to remove the support on January 1, before partially reinstating it after more than a week of protests.

The Economic and Financial Crimes Commission on Tuesday released a list of 20 companies and individuals that it plans to charge over illegally collecting billions of naira in subsidy payments for fuel they never delivered.

The individuals and companies listed are all from low-level Nigerian firms, although the EFCC said more than 100 other marketers were being investigated.

The presidential committee said on Tuesday fuel traders collected N382 billion last year in fraudulent subsidy payments.

NNPC’s claim yesterday of being owned by the government was not the first. In 2010, the corporation said it was not able to pay its N450 billion debt to the Federation Account because government owed it over N1 trillion. It later agreed to defray the N450 billion debt in installments.