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Subsidy: Exposing the underbelly of corruption in oil sector

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By Lawrence Olaoye

The fact that corruption is synonymous with the nation’s oil and gas sector is not news, but the magnitude of sleaze and financial malfeasance exposed by the House of Representatives investigations into the oil subsidy regime has the capacity to make someone run mad.
The ad-hoc committee under the Chairmanship of Rep Farouk Lawan expectedly did a thorough job and had last week submitted its reports which indicted major players in the industry. The Committee recommended that the Nigerian National Petroleum Corporation (NNPC), the Petroleum Products Pricing and Regulatory Commission (PPPRA), Oil Marketers and other affiliated companies be made to refund over N1 trillion. This alleged scam happening in a country where more than half of its population is living below poverty line is a marvel.
The committee in the report laid before the House plenary stated that the amount was sequel to several violations of extant laws by the players in the nation’s oil sector.
According to the reports,  NNPC was to refund the sum of N310,414,963,613.00  on Kerosene subsidy; N285,098,000,000.00 for payment above made to itself PPPRA recommendation and N108,648,000,000.00 it rewarded itself as self discount.
All the marketers investigated at the public hearing are to refund the sum of N8,664,352,554; companies that refused to appear before the committee are to refund N41,936,140,005.31 while the PPPRA is expected to refund the sum of  N312,279,000,000 as excess payment to itself.
The reports stated “The NNPC should refund to the Federation Account the sum of N310,414,963,613 paid to it illegally as subsidy for kerosene contrary to the Presidential Directive of July 29th, 2009 withdrawing subsidy on the product.
Critics have come to regard the activities of the indicted men and institutions as economic sabotage. Economic commentators have submitted that the so called subsidy removal by the Federal Government on the first day of the year that ignited the violence which led to the death of scores of Nigerians across the country should be revisited.
The revelation that the NNPC, which is supposed to protect the interests of the people by making Kerosene available to the common man, pocketed over N300 billion of the subsidy without making the commodity available has made the image of the behemoth to diminish in the estimation of the public. The continuous deduction of the Kerosene subsidy even when there was a Presidential directive to the contrary amounted to bureaucratic recklessness.
In spite of the artificial façade of financial buoyancy, the panel revealed that the financial health of the NNPC was suspect afterall as there were plethora of claims in billions of Naira and Dollars against the corporation. For instance, the Corporation is owing the Nigeria Customs the total sum of N46 billion; Nigeria Ports Authority, N6 billion and Transfigura and other international oils companies $3.5 billion.
The Corporations debt profile has made the committee to recommend that the NNPC should be thoroughly audited to ascertain its level of solvency. Failure to carry out extensive audits may lead to grave economic consequences as such could disrupt the supply and distribution of petroleum products in the country.
Although the committee has recommended that the entire management of the NNPC be overhauled and those found involved in series of infractions be further investigated and prosecuted, many Nigerians including the Nigerian Labour Congress (NLC) have clamoured for wholehearted implementation of the recommendations.
There are fears that the government may not have the political will to arrest and prosecute those involved in the corrupt deals in the oil sector as they include heavy political gladiators and economic movers in the country. The committee stated “The Executive Secretaries of the PPPRA who were the accounting officers, and under whose watch these abuses were perpetrated that led to the Government losing billion of naira, should be held liable. Therefore, we strongly recommend that those who served as Executive Secretaries of PPPRA from January 2009 to October 2011 should be further investigated/prosecuted by relevant anti-corruption agencies.”
Although there are fears that the report of the investigations may go the way of others in the parliament, nevertheless, the people are at alert to ensure that those indicted within the period recommended are tried and possibly jailed for economic crimes against the country. A certain powerful individual, who had been at the helm of affairs in the ruling People Democratic Party (PDP) in the past, though not specifically mentioned, was involved in the scam. This is because he was one of the Chairmen of the PPPRA within the specified period.
Again, there are unsubstantiated claims that those fat-cats who were neck-deep in the subsidy scam were those who allegedly funded the expensive Presidential campaigns of President Goodluck Jonathan. Analysts therefore confirmed that getting these men prosecuted by the government they helped enthrone may be difficult.
But, for emphasis on the need to prosecute the culprits, the NLC has called on the government to ensure that the resolutions of the House on the subsidy regime’s probe are implemented to serve as deterrents to other.
The NLC in a statement signed by the Acting General Secretary of the NLC, Owei Lakemfa, stated that some of the findings of the House report clearly indicated criminality; just as he added that it was not enough for private and public organizations like the NNPC and PPPRA to be asked to make refunds, but that government has a duty to bring the officers of such organizations and their supervisors to justice.
NLC also requested that Ministers in the Finance and Petroleum Ministries and their lieutenants under whose watch the NNPC made unconstitutional deductions from the country’s oil income before dumping the balance in the Federation account be investigated for culpability.
It maintained further that the massive looting of the subsidy funds and the corruption in the oil industry were sufficient grounds for the N97 per liter cost of PMS (petrol) to be drastically reduced, advising the government to do local refining; stressing that the cost of PMS needs not be as high as the old price of N65 per liter.
According to NLC, the report was a mere tip of the iceberg because there was the need for further investigations. He noted that the recommendation that the Executive Secretaries of the PPPRA from 2009 till date be probed did not go far enough.  “There is the need to probe the oil industry from the inception of civil rule after the rapacious military regimes had departed,” he asserted.
He said that the report of the House of Representatives ad-hoc Committee on fuel subsidy regime has revealed that the criminal looting of the nation’s resources resulted in the mass protest that greeted the subsidy removal policy of the federal government.
The House on its own has vowed to ensure that the resolutions of the House on the probe are implemented Asked how the House intends to do that, Chairman of the Committee on Media and Publicity, Rep Zakari Mohammed said “We cannot waste time and money and allow the reports to be thrown into the dust bin; the executive will come to us for something and we can make it a precondition for the House resolution to be implemented before we grant its request. The law is an ass.”
As clear as the process of indictment of the players in the nation’s oil sector seems to be, certain people have begun to plot its derailment as they have started to impugn the committee of sentiments in a bid to politicize the reports and rubbish the efforts of the panel. Rep Lawan disclosed that there were serious efforts by those within and outside government circles to subvert the efforts of his committee but that that the patriotic zeal of the members saw them through. Even now, there are moves ongoing from some of the indicted oil firms to lobby some of the lawmakers to kick against some of the recommendations, especially where they are being mandated to return funds into government coffers when the plenary resumes debate of the reports next week.

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