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Senate approves N348bn bond issuance to settle subsidy debts

The senate has approved the issuance of bonds and promissory notes worth N348 billion to settle contractual obligation to oil marketing companies (OMC).

President Muhammadu Buhari had requested the senate’s approval to enable the federal government to settle subsidy claims.

The senate also directed that money be used to pay 74 oil marketers to combat threats of fuel scarcity and enhance the relationship between government and companies.

The resolution reached this decision after adopting the interim report of the committee on petroleum (downstream).

Of the amount, the senate said N275.7 billion should be paid to 55 companies whose debt figures have been verified and N73.4 billion to the 19 companies with contentious claims.

The N73.4 billion represents 65% of the contentious claims, pending when all issues would be resolved.

According to the adopted report, the ministry of finance put the subsidy claims at N429 billion based on calculations by the Petroleum Products Pricing Regulatory Agency (PPPRA).

However, the verification exercise by the Presidential Initiative on Continuous Audit (PICA) put the figure at N407.5 billion as of June 30, 2017, while the marketers claim that they are owed N670.4 billion.

Some of the oil marketers and the amount approved for them are: Aiteo N4,988,199,360; Conoil N5,588,285,132; Forte Oil N15,480,445,907; Bovas N5,953,684,258; Capital Oil N8,339,052,402; Mobil N8,282,363,478; MRS Oil and Gas N20,948,270,002; Oando N14,972,585,600; Total N21,569,996,843.

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