WHERE ARE THE BILLIONS? FG says fuel subsidy account is empty

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 has yet to be backed by cash by the Minister of Finance, Dr Ngozi Okonjo- Iweala.

The PUNCH’s investigations showed that oil marketers, who went to the CBN on Monday, were turned back on the grounds that the subsidy account with the bank had not been credited.

Our correspondent learnt that the oil
marketers had been issued Sovereign Debt
Notes from the Debt Management Office
following the passage of the N161.6bn supplementary bill by the National Assembly.

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 top official in one of the oil marketing companies confirmed to our correspondent during a telephone interview
that they were turned back by the CBN.
The source, who pleaded not to be named as he was not officially permitted to speak on the issue, said accounts
of all oil marketers who had been issued with DMBs could not be credited because the subsidy account with the CBN was empty.

He said, “There might be another round of scarcity because most of us are still being owed by the Federal

“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.”

Via Punch

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