Government resumes subsidy payment to petroleum marketers

The Federal Government has resumed the payment of subsidy to petroleum products marketers in an apparent move to check the potential disruption in fuel supply in the wake of the impending strike by petroleum products marketers and other stakeholders.

Already, payments based on verified claims were made to various marketers last month according the revenue allocation and distribution report issued at the end of the June meeting of the Federation Accounts Allocations Committee (FAAC), which showed that a total of about N17billion was disbursed.

This followed a directive to the Debt Management Office (DMO) to commence the process of payment of all verified subsidy expenditures incurred by petroleum products marketers as soon as the supporting Sovereign Debt Notes are provided by the Petroleum Products Pricing and Regulatory Agency (PPPRA). 

Citing the need to ensure prudence in the management of subsidy payments, the Minister of Finance and Coordinating Minister for the Economy, Ngozi Okonjo-Iweala, said the suspension of payment of subsidy claims on petroleum products imports was to allow for the verification of discrepancies uncovered in the process.

Senior Special Assistant (Media) to the Minister, Paul Nwabuikwu, said the directive was to reinforce the government’s determination to ensure that only genuine, duly verified and substantiated claims are paid.

However, since the suspension of the payment, petroleum products marketers have threatened to halt further fuel importation unless government cleared the outstanding indebtedness to them for subsidy expenses incurred in the importation of products in the past.

The marketers, under the aegis of Independent Petroleum Marketers Association of Nigeria (IPMAN) said only immediate reimbursement of the subsidy expenses would reverse their threat and remove the potential disruption in fuel supply in the country.

Members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), the National Union of Petroleum and Natural Gas Workers (NUPENG) and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMA) also warned last week of plans to withdraw their services to press for the immediate settlement of the subsidy arrears to marketers. 

But, the minister said the suspension of the payment was in good faith, as the report of the Aigboje Aig-Imoukhuede Presidential Committee on fuel subsidy payments verification and reconciliation clearly revealed that some marketers also owed government significant various sums of money they have to refund.

According to Mrs. Okonjo-Iweala, with government’s assurances of funds to pay the claims, there was no reason for marketers and other stakeholders to threaten to embark on strike, adding that government is addressing the subsidy payment issues in a structured manner to protect the country’s interests and those of genuine marketers.


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