THE
House of Representatives probe panel on subsidy fund mismanagement has
recommended that the Nigerian National Petroleum Corporation, the
Petroleum Products Pricing and Regulatory Agency and 72 other firms
refund N1.07tn said to have been fraudulently paid to oil marketers.
To be part of the refund
is also the Office of the Accountant–General which allegedly paid
N127.8bn within 24 hours to unknown beneficiaries. The AGF paid N999m 28
times in one day to the “unknown entities.”
The affected firms as
well as the AGF office are expected to make the refund of the sum, said
to have been the excess paid to marketers involved in fuel-importation
racketeering “within three months.”
These are contained in
the report of the House AdHoc Committee on Monitoring of the Subsidy
Regime, led by Hon. Farouk Lawal, submitted on Wednesday.
The committee was set up
in the wake of the nationwide uproar that greeted the January removal
of subsidy on fuel by the Federal Government and the controversies
arising from the management of the subsidy fund.
The committee, which
recommended the immediate unbundling of the NNPC, also established that
the total subsidy claims paid by the Federal Government in 2011 was
N2.587tn.
It said that the figure
represented “more than 900 per cent over the appropriated sum of N245bn”
originally budgeted for subsidy in the 2011 budget.
The report says, “This
figure of N2.58tn is based on the Central Bank of Nigeria figure of
N844.9bN paid to the NNPC, in addition to another N847.9bn reflected as
withdrawals by the NNPC from the naira excess crude account, as well as
the sum of N894.2bn paid as subsidy to the marketers.
“The figure of N847.9bn
quoted above strongly suggests that NNPC might have been withdrawing
from two sources, especially when the double withdrawals were also
reflected both in 2009 and in 2010.
“However, it should be
noted that as at the time the public hearing was concluded, there were
outstanding claims by NNPC and marketers in excess of N270bn as subsidy
payment in 2011.”
A breakdown of the
N1.07tn recommended for refund showed that the NNPC would return
N310.4bn for subsidy it fraudulently claimed for kerosene.
The corporation is to
cough up another N285bn it claimed for fuel imports “above the PPPRA
recommendation.” Another amount of N108.6bn was listed against the NNPC
as “self-discount.”
The PPPRA was asked to
refund N312bn it paid to itself, while the marketers who “violated
Petroleum Subsidy Fund” were directed to return N8.6bn to government
treasury.
In the category of defaulting firms, who also “refused to appear” before the panel, it recommended the recovery of N41.9bn.
The panel raised the
alarm over the existence of “unnamed entities,” which it said claimed
N999m “128 times to the tune of N127.8bn.”
It called on the
Economic and Financial Crimes Commission and other antigraft agencies to
investigate the operations of these agencies along with the
“questionable” claim of $402.6bn Foreign Exchange.
“The 72 companies listed
under the financial forensics are hereby recommended for further
investigation by the relevant anti-corruption agencies, with a view to
establishing their culpability and recovering the sums indicated against
their names totalling N230.1bn,” the panel noted.
A curious case
established by the panel in respect of subsidy payments in 2009 was an
unnamed Accountant-General, who approved the payment of N999m 128 times
“within 24 hours on the 12th and 13th of January 2009, totalling
N127.8bn.”
“The confirmed payments
from the CBN records were made to beneficiaries yet to be disclosed by
the OAGF or identified by the committee”, the report noted.
The panel was
particularly hard on the NNPC over its tendency to deduct subsidy claims
without recourse to any approving authority and the alleged abuse of
the 445,000bpd of crude it took for domestic refining.
It raised doubts over the financial status of the NNPC and recommended the “auditing of the NNPC to determine its solvency.”
The panel said members
were concerned because of the “plethora of claims of indebtedness and
demands for payments by NNPC’s debtors, which if not well handled, will
not only affect the entire economy of Nigeria, but also the supply and
distribution of petroleum products.”
Among the outstanding
debts, according to the panel’s findings, are N46bn (Nigeria Customs
Service); N6bn (Nigeria Ports Authority); and N$3.5bn (Trafigura et al).
It noted that Nigeria
could no longer afford to maintain the NNPC’s bogus structure and
recommended the unbundling of the corporation.
It said, “The committee
recommends that the NNPC should be unbundled to make its operations more
efficient and transparent, and this we believe can also be achieved
through the passage of a well-drafted and comprehensive Petroleum
Industry Bill.
“The committee therefore urges the speedy drafting and submission of the bill to the National Assembly.”
All members of staff of
the NNPC, PPPPRA and DPR involved in the processing of applications for
fuel imports were recommended for investigation for “negligence,
collusion and fraud.”
The panel determined the
“probable” daily consumption of Premium Motor Spirit for the country,
saying that out of the total volume of 14.7bn litres imported in 2011,
over-invoicing accounted for 3.2bn litres.
“Thus, the actual volume
imported for 2011 was 11.5bn litres.This manifested into an average of
daily PMS consumption of 31.5m litres”, it said.
For kerosene, the panel recommended nine million litres as the daily ordering quantity.
Based on its findings,
the panel recommended the sum of N806.7bn as subsidy provision for 2012,
covering PMS and kerosene. This was broken into N529.9bn for PMS and
N249bn for kerosene.
A provision of N27.7bn was made for a first quarter strategic reserve of 7m litres of PMS.
As a Lawan laid the
report in plenary on Wednesday, the Speaker of the House, Mr. Aminu
Tambuwal, directed that copies should be circulated to all 360 lawmakers
latest by Thursday (today).
But, a mild drama
ensued, as a member, Mr. Ali Maigari, raised a point of order calling
for an executive session. His request came as Lawan made to submit the
report.
Maigari said he wanted the closed-door session to hold after the report was laid. He was obliged by the House.
At the session, which
lasted over one hour, members reportedly expressed concern over the
“circulation of conflicting and distorted versions” of the panel’s
report.
Lawan was said to have absolved himself of blame, insisting that the earlier versions did not come from the panel.
“We also discussed the 2012 budget, especially as it affects provisions for our constituency projects”, a lawmaker confided in us.
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