Gov't starts paying P1.2bn arrears to oil companies

Several highly-placed oil sector insiders told BusinessWeek that government last week wrote to the four oil companies asking for audited sales volumes – the traditional sign that payments are imminent.

Between December 2016 and now, the local oil industry has been in a state of under-recovery – where pump prices are below actual prices incurred by oil companies in importing fuel. The National Petroleum Fund (NPF), which, among other duties, collects levies from motorists and is supposed to support the subsidy by paying the oil companies, is on its knees. For every litre of fuel motorists pay for, 13.5 thebe is remitted by oil companies to the NPF raising hundreds of millions of Pula annually, but the Fund only had P98 million as at March this year. Perennially threadbare, the NPF’s troubles have been worsened by its highly publicised legal troubles, involving an alleged P230 million money laundering criminal case.