The Nation Newspaper

Tag: NNPC

  • Petrol scarcity: Kwara warns against panic buying

    Petrol scarcity: Kwara warns against panic buying

    •Queues resurface in Iseyin

    The Kwara State government has called on residents to refrain from panic buying of petrol, following reports of scarcity of the product.

    Special Assistant to the Governor on Petroleum Monitoring Lawal Isiaka told the News Agency of Nigeria (NAN) yesterday that there was no reason for panic buying.

    “The vandalised pipeline on Ogbomosoroad, which supplies petroleum products to Ilorin, has been repaired.

    “So these marketers who closed their stations to create artificial scarcity because of bridging of fuel at Oke-Oyi depot will be disappointed.

    “l want to warn fuel marketers who sell the product above the official pump price to desist as anybody caught will face the wrath of the law,’’ he said.

    A NAN correspondent reports that residents besieged the few stations where the product was being sold.

    At Omu Aran, headquarters of Irepodun Local Government Area, no filling station was selling to consumers as at 3pm on Sunday.

    NAN investigation showed that most independent operators closed in Ilorin, while there were queues at the NNPC stations and outlets of major marketers, such as Mobil and Total.

    State Chairman of Independent Petroleum Marketers’ Association of Nigeria (IPMAN) Bashir Olopade attributed the situation to inadequate supply of the product to their members.

    “Can you believe that over 300 of our members in this state were being supplied with two trucks only on a daily basis?

    “There is scarcity because the independent marketers are not loading as expected; the loading is now a camouflage.

    “ What we do now is to go for bridging by approaching independent depots in Lagos,’’ he said.

    State Controller of the Department of Petroleum Resources (DPR) Amos Jokodola said he was on leave and could not make any comment.

    In Iseyin, Oyo State, queues resurfaced in many filling stations following the scarcity.

    NAN reports that most filling stations closed while the few selling had queues.

    A NAN correspondent reports that filling stations owned by independent marketers at Koso, Bolamarck, Barracks and Oja-Agbe had queues.

    NAN also reports that only five of the 25 stations in the area were selling petrol.

    Some motorists said they had parked their vehicles in different stations since Sunday night to enable them buy fuel.

  • NNPC debunks bribery allegation in kerosene allocation

    NNPC debunks bribery allegation in kerosene allocation

    The Nigerian National Petroleum Corporation (NNPC) has dismissed allegations that its workers collect a N25 per litre mobilisation fee from marketers before allocating kerosene to them as lies fabricated by some persons to tarnish the image of the corporation.

    Its Acting Group General Manager, Group Public Affairs Division, Dr. Omar Farouk Ibrahim, challenged anyone with evidence of such payment to tender it so that the persons concerned could be identified and punished.

    It said there was a report stating that NNPC officials collected bribes amounting to N195 billion from marketers before allocating kerosene to them.

    Ibrahim said: “We make bold to state that this allegation is a complete falsehood, callous and malicious. We recall that this is not the first time such unfounded allegations are made against the NNPC. The Senator Magnus Abe-led Committee on Petroleum (Downstream) called all the stakeholders in the downstream sub-sector for a public hearing over similar allegations. No one came out to confirm the allegations.”

    He said petroleum marketers under the aegis of Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Depot and Petroleum Products Marketers Association (DAPPMA) have come up with statements denying ever paying any amount of money beyond the approved N40.90 per litre ex depot price for kerosene.

  • Amnesty programme got N243b, says Kuku

    Amnesty programme got N243b, says Kuku

    The Amnesty Office of the Federal Government has denied receiving N400 billion since the inception of its programme.

    The office urged the Nigerian National Petroleum Corporation (NNPC) to involve former Niger Delta militants in the protection of its pipelines in the region.

    It claimed that this is the only guarantee for peace and security in the region.

    Also, there were indications that the programme, which is supposed to expire by 2015, will be extended till 2017, because more people have enrolled into the programme.

    The Special Adviser to the President on Niger Delta, Kingsley Kuku, addressed reporters yesterday in Abuja on the activities of the Amnesty Office.

    Kuku described the claim that the office had received N400 billion as malicious.

    The presidential aide noted that the rumour was capable of inciting Nigerians and the international community against the Amnesty programme and its beneficiaries.

    He said: “I want to set the record straight on the exact funding status for the Amnesty programme for former agitators in the Niger Delta since the proclamation of Amnesty in 2009. I want to clarify that the Amnesty programme has received just N243,133,917,590.03 since inception and not the N400 billion or N260 billion that is currently making the rounds in a section of Nigerians media.

    “In fact, we have noticed that in an attempt to inflate figures purportedly allocated to the Amnesty programme, certain desperate politicians and their allies in the media formed the habit of collating the budgets of the Niger Delta Development Commission (NDDC) and that of the Ministry of the Niger Delta and lump them up as what has been earmarked for the Amnesty Programme.”

    Kuku, who said no ex-agitator was given the protection of oil pipelines contract, added that their (ex-agitators) involvement in the protection of oil facilities would guarantee peace and security in the region.

    He said: “Following claims by oil and gas multinationals as well as the NNPC that certain sums are currently being spent on the surveillance and protection of pipelines across the Niger Delta, the impression has been created that these contracts are going to ex-agitators enlisted in the Amnesty programme. As far as I know, it is not true.

    “I am aware that sometime in 2011, the Federal Government, through the NNPC, got several of the persons enlisted in the Amnesty programme involved in the surveillance and protection of the pipelines that crisscross their communities. It was the right thing to do, given that it is only persons who understand the terrain where these pipelines lie that can protect them.

    “However, in less than one year, this deal to get ex-agitators involved in pipeline protection was stopped by the NNPC and its joint venture partners.

    “As far as I know, as we speak today, I am not aware that any ex-agitators enrolled in the Amnesty programme is currently a beneficiary of pipeline protection contract as being supervised by the NNPC.

    “The Amnesty Office is urging the NNPC and its joint venture partners to properly restructure the modalities for the implementation of the pipelines surveillance and protection contracts and get as many ex-agitators as possible involved.

    “They should not be blackmailed in any way. The person who can protect his house is the owner, and this is the process that is lacking. If they are not involved, they will frustrate those who are not part of the community but benefiting from the community. This process will stabilise the peace in Niger Delta.”

     

     

     

  • Twist in the kerosene subsidy tale

    Twist in the kerosene subsidy tale

    The Nigerian National Petroleum Corporation (NNPC) and the Central Bank of Nigeria (CBN) have been squabbling over non-remittance of revenue due to the government. Both sides are holding-on to their positions. The NNPC is faulting the CBN’s claim on the actual amount of unremitted fund. Assistant Editor, EMEKA UGWUANYI reports.

    Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi’s memo kicked off the storm.

    In the memo to the Senate Committee on Finance, he said from the CBN’s calculation, of the $67 billion crude oil lifted, only $47 billion has been remitted, leaving a $20billion balance.

    He said the cash legally and unconstitutionally withheld, diverted or spent by the Nigerian National Petroleum Corporation (NNPC) is in excess of $10.8 billion, an amount that was reportedly reached after reconciliation by the Ministry of Finance, the CBN and other revenue generating agencies.

    NNPC, according to him, said a major component of the $10.8 billion was spent on kerosene and petrol subsidy.

    Sanusi said he had evidence of a presidential directive stopping kerosene subsidy, claiming that kerosene subsidy is illegal and should be refunded to the Federation Account.

    He raised serious concerns about NNPC’s crude swap arrangement, adding that oil revenue which should accrue to the Federation Account from the Nigerian Petroleum Development Company (NPDC), the exploration and production subsidiary of NNPC, is being diverted to private companies, such as Atlantic Energy and Seven Energy, which resulted in non-remittance of $6 billion of gross crude revenue that should be remitted to the Federation Account by NPDC as part of the divested assets.

    At its sitting last week, the committee and other parties resolved to appoint independent forensic auditors to investigate transactions in the oil and gas sector. The auditors, the Coordinating Minister of the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala said, would examine the books of NNPC and NDPC to clarify the issues.

    Mrs. Okonjo-Iweala said the step would help to unravel the controversies surrounding the alleged unremitted $20 billion by the NNPC, adding that since the $10.8 billion had been accepted by all parties as the outstanding amount, an independent body would be appointed to investigate the financial transactions involving oil exports.

    She said since conflicting figures were being mentioned by the CBN and the NNPC, the only way to establish the truth is to set up an independent body to verify all the parties claims. Nigerians are awaiting the forensic auditors reports.

    Sanusi also alleged that the implementation of kerosene subsidy is a violation of the HHK deregulation order by the late President Umaru Yar’Adua. He said the presidential directive was sent to NNPC, adding that the average supply of kerosene vessel by NNPC was between four and six vessels per month where conversion factor of 1,136 equals to one metric ton. He added that NNPC rendered nil returns on kerosene subsidy from April 2012 to December 2013, besides delay in filing subsidy claims to Petroleum Products Pricing Regulatory Agency (PPPRA). The entire subsidy implementation is a farce, he noted.

    NNPC said Sanusi misrepresented facts in alleging that it violated the presidential directive.

    “The factual position is that the late president issued a directive on the deregulation of kerosene but the administrative procedure for the implementation was not concluded before his death,” NNPC claimed. It said:”As a matter of fact, the presidential directive contained conflicting provisions that required further clarification to warrant implementation. The NNPC attempted through several correspondences to seek clarifications on the conflicting clause in the directive without any positive response. It would appear that Sanusi ran into the same difficulty encountered by NNPC in interpreting the controversial presidential directive when he suppressed facts in his submission before the committee.

    “For the avoidance of doubt, the express letters of the controversial presidential directive is to the effect that commencing from July 2009, “Eliminate existing subsidy on the consumption of kerosene, taking into account that subsidy payments by the government, on kerosene do not reach the intended beneficiaries. Public announcement of this measure should be avoided.

    “The Petroleum Act empowers the Minister of Petroleum Resources to approve petroleum product prices – HHK inclusive and the statutory provision remains un-amended. Such approval must be through the means of a Gazette, the Minister of Petroleum Resources cannot change prices of Petroleum Products without a gazette. Meanwhile, the directive was that “public announcement of this measure should be avoided” in direct contravention of the provision of Section 6 of the Petroleum Act.

    “The directive on kerosene subsidy was never received in NNPC as posited by Sanusi. Rather the directive was communicated to the former Minister of Petroleum Resources Dr Rilwan Lukman who could not communicate the directive to NNPC arising from the challenge indicated in the earlier paragraph of this submission.”

    NNPC said the volume of HHK supply to the system within the period was five vessels contrary to an average of four to six vessels per month as alleged by Sanusi and the subsidy implication of kerosene signed by the PPPRA at the inter-agencies reconciliation from January 2012 to July 2013 is $3.511billion.

    The House of Representatives Committee on Petroleum Resources (Downstream) will begin public hearing on kerosene subsidy this week. There are allegations of fraud in the kerosene importation, allocation and distribution within the chain. The committee, industry stakeholders believe, will address the issues because the commodity doesn’t reach the public at the regulated N50 per litre but is purchased at between N100 and N150 per litre depending on the area.

    “In the case of NPDC, its Managing Director, Mr. Victor Briggs, said strategic alliance agreement (SAA) did not start today. He said the company’s offshore field Okono Okpoho is a service contract, which was went into with Agip around 1999. In that service contract, the partners comes in with their financing, because at that time we have not gone offshore before, and because they also operate that field with their own financing, they will recover their cost, we will share the profit. They would do that for a period of five years by, which time NPDC would have been able to build its capacity to operate.

    “But when we took over the operatorship of the new assets divested by Shell, funding was an issue. The practical thing to have done is, let’s do a service contract but NPDC didn’t opt for a service contract because that means a third party will operate the asset and provide the financing. But we have technical capacity, what we were looking for is financing. What was done was strictly financing and also at our desire request for experienced personnel, to be seconded to us. That option is also critical because at NPDC, we don’t recruit. If we need to act quickly, where we need people, we have to rely on NNPC to recruit and deploy and that will take a long time.”

  • Marketers allege inadequate supply of products

    The Nigerian National Petroleum Corporation (NNPC) is yet to fix the Ijegun pipeline supplying products to Mosimi from Atlas Cove, weeks after it was vandalised, the Zonal Trustee, Independent Marketers Branch (IMB) of National Union of Petroleum and Natural Gas Workers(NUPENG), Kofoworola Olasehinde, has said.

    This, Oil Marketers Association of Nigeria (MOMAN), and Independent Petroleum Marketers Association of Nigeria (IPMAN), claim is affecting them as they do not get enough supply from the depot.

    Olasehinde said marketers were allotted 20 tankers at the weekend, instead of the usual 80 to 90 tankers per day. The same situation prevailed last Thursday when marketers shared 30 trucks. The marketers, the sources added, shared less than 30 trucks among themselves on Wednesday after waiting for hours for the product.

    Sources said independent marketers got six trucks on Monday, major marketers (five) and mega marketers (five) last tMonday.

    The sources said: “Low stocks exist in Mosimi NNPC’s depot since three weeks ago when the pipelines got vandalised. The reason is because the depot cannot access enough fuel from Atlas Cove Jetty for onward distribution to Ejigbo, Ibadan, Ilorin and Ore depots.

    Before now the depot supplied 80 trucks per day (400 trucks) per week to marketers since it operates between Monday to Friday. Nigerians have not been feeling the effects because many marketers still have oil in their tanks. If the trend continues, there would be scarcity of petroleum products in Ibadan and Ilorin depots since they got their supplies from Mosimi.”

    Olasehinde said the depot has been struggling to meet the needs of the marketers since the pipeline was vandalised in Ijegun.

    Oladehinde said the pipeline is the link between Atlas Cove Jetty, Lagos and Warri Refinery, adding that the development has affected fuel supply to Mosimi depot.

    He said the Ijegun pipeline vandalism worsened the problem, noting that the Ore pipeline has being vandalised making it difficult for marketers to get fuel from that end.

    ‘’When fuel is coming from Warri Refinery, it passes through the pipeline in Ijegun.”

  • NNPC saves $565m through swap regime

    NNPC saves $565m through swap regime

    • Why kerosene subsidy persists

    The Nigerian National Petroleum Corporation (NNPC) has saved the country over $565 million through the crude swap and offshore processing arrangement since the business model commenced in 2010.

    A document obtained by The Nation from a top official of NNPC, showed that the average premium paid per metric tonne (MT) on premium motor spirit (PMS) under the swap/crude exchange arrangement has remained stable at $81.28 through 2010 to 2013 while under the open account regime; PMS average premium paid per metric tonne has continued to increase. Under the open account regime, PMS average premium paid per metric tonne in 2007 was $70.02, which rose to $85.14 in 2008 and in 2009 to $87.50 and further to $116.50 in 2010.

    The data showed that in 2010, $141,266,580.77 was saved from products import through swap/crude exchange arrangement. Under the open account regime, the premium was systematically growing every year due mainly to the variable market conditions that NNPC was exposed to. As a result of the development, the corporation has saved over $565,066,320 since the inception of the swap arrangement four years ago.

    The document reads: “Under SWAP/Crude Exchange arrangement, NNPC allocates crude oil to reputable oil trading companies in exchange for the delivery of PMS, dual purpose kerosene (DPK) or any other petroleum product as may be required by Products and Pipeline Marketing Company (PPMC).

    “The contract is based on the international market value of the petroleum products against the prevailing International market value of the Crude Oil. This is value for value arrangement; crude oil lifted versus products supplied. The value for value philosophy enshrined in the SWAP contracts is validated and tested on a regular basis, when reconciliation meetings are held between NNPC and the trading companies.

    “Offshore Processing Arrangement (OPA/SWAP) arrangements enjoy presidential approval and their operations are governed by contractual agreement. Furthermore, the entire activities under OPA/SWAP were recently subjected to scrutiny by the House of Representatives Committee on Downstream with a verdict of clean bill of health returned.”

    The most common means of pricing petroleum products internationally is by Platts European Marketscan Oil Publication. NNPC procures petroleum products cargoes mainly on free on board (FOB) basis; as a result, the supplier provides all necessary logistics for loading and delivery of the product on behalf of NNPC. Therefore, the basic components that are taken into consideration in deciding the premium are as follows: freight, insurance, financing (letter of credit L/C administration charges), port dues, interest, demurrage, trader’s margin.

    The document also explained why the NNPC is continuing with kerosene subsidy despite claims by the Governor of Central Bank of Nigeria (CBN), Mallam Sanusi Lamido Sanusi of having evidence of presidential directive to its stoppage. The directive Sanusi refers to, according to the document, was not gazetted.

    It said: “Household kerosene (HHK) inclusive and the statutory provision remains un-amended. Such approval must be through the means of a Gazette, the Honourable Minister of Petroleum Resources cannot change prices of petroleum products without a Gazette. Meanwhile, the directive was that “public announcement of this measure should be avoided” in direct contravention of the provision of Section 6 of the Petroleum Act.

    “The directive on kerosene subsidy was never received in NNPC as posited by Mr. Sanusi. Rather the directive was communicated to the former Honourable Minister of Petroleum Resources – Dr Rilwan Lukman who could not communicate the directive to NNPC.

     

    “There was also an intervening factor, the House of Representative Resolution in July 2011 barred the Honourable Minister of Petroleum Resources from deregulating the price of HHK even with the best of intentions and directed an increase in volume of HHK for the market and the sale of HHK at N50 per litre.”

     

     

  • Missing $10b oil cash: Fashola urges minister, others to speak up

    Missing $10b oil cash: Fashola urges minister, others to speak up

    Lagos State Governor, Mr. Babatunde Fashola (SAN) has called on the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, the management of stste-run oil firm, the Nigerian National Petroleum Corporation (NNPC) and those connected with the missing $10 billion oil money to speak out in the interest of the nation.

    Fashola, who spoke at the Lagos House, Ikeja yesterday said continued silence of the stakeholders on the issue constituted an injustice against the ordinary Nigerians who have had to contribute from their meagre earnings to fund projects and programmes that are constitutionally the responsibility of government.

    The governor identified the provision of security as an item which naturally falls within the ambit of the responsibility of government but which individuals and private organisations are now contributing to provide in order to secure themselves and their environment while the Federal Government could not account the nation’s commonwealth. He said the missing money could go a long way to fund the Police and strengthen security in the country.

    Thanking organisations and individuals who have been contributing to the State’s Security Trust Fund, Governor Fashola said: “The tragedy of our nation is that while we are debating whether we have accounted for $20 billion or $10 billion, ordinary citizens are contributing money to fund the responsibility of government.

    “It hurts me but this is where we are because you can only wonder and imagine what $10 billion can do for the Police; what $10 billion can do in terms of vehicles, in terms of the kind of truck donated, in terms of equipment. But I hope that things get better.”

    The governor urged those concerned in the missing money saga to speak out, adding that the matter could only be resolved when it is brought out to public domain.

    “I have said the issue of accounting for that money must be resolved publicly in the interest of Nigerians. It is a debate that all of us must participate.

    “Peacefully, we will resolve it, whether it is $10 billion or $20 billion. We must know where that money ended up and everybody that has a duty, including the Minister herself, must speak up now,” he said.

  • Again, NNPC, ministry scuttle kerosene probe

    Again, NNPC, ministry scuttle kerosene probe

    Officials of the Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and the Pipeline and Products Marketing Company (PPMC) yesterday again scuttled the House Committee on Petroleum (Downstream) investigative hearing on kerosene subsidy, with last minute excuses, writes OLUKOREDE YISHAU

    Dakuku Peterside, who chairs the House of Representatives Committee on Petroleum (Downstream), and members of his committee were upbeat on Sunday. They had put in place everything for the investigative hearing on the kerosene subsidy and were looking forward to a good outing. The public hearing is sequel to resolution HR84/2013, directing the committee to establish the actual amount spent on kerosene subsidy from 2010 to December last year; establish the source of the money used in financing kerosene subsidy and the relevant budgetary approval; determine the companies benefiting from kerosene subsidy; establish the extent (if at all) to which the subsidised kerosene gets to the consumers at the regulated price; and investigate all incidental issues relating to kerosene supply and distribution.

    Some weeks earlier, they had been forced to postpone the hearing after key government officials expected to shed light on the matter bailed out. Peterside and his men were hoping yesterday’s event would not suffer the same fate, especially when none of those invited notified the committee that they would not attend. But as the committee was awaiting the officials, the letters of excuse started coming in. The Ministry of Petroleum Resources, the Nigerian National Petroleum Corporation (NNPC) and the Pipelines and Products Company Limited (PPMC) sent letters giving excuses why for the second time the hearing must be postponed.

    All the letters were dated February 7, but were not received until some minutes before the hearing was to start, which did not go down well with the committee. The ministry’s letter reads: “I wish to inform you that the Honourable Minister together with the top management of the Ministry and its agencies will be participating in the International Summit on Power Financing starting today, 10th February, 2014.

    “As a result we regret to inform you of our inability to honour your invitation. We are also currently engaged with the Senate Committee on Finance and it is not clear when their hearing will end. ”

    The NNPC and PPMC letters also asked for more time. The NNPC said: “I am further directed to appeal to the Chairman to allow NNPC and its subsidiary sufficient time to collate the required documents and reschedule an alternate date for the appearance of our organisation at the hearing, please.”

    Peterside, in a letter to the minister yesterday, faulted the excuses. He said the excuses were unacceptable to the committee. He described the excuses as belated and not justified, adding that the ministry was long aware of the hearing and was even reminded last Friday.

    Peterside said the minister, NNPC GMD Andrew Yakubu and the PPMC must appear before the committee on February 18.

    Others expected are Min

    ister of Finance and Coordi

    nating Minister for the Economy Mrs Ngozi Okonjo-Iweala, Central Bank of Nigeria (CBN) Governor Sanusi Lamido Sanusi, Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Director, Department of Petroleum Resources (DPR), Accountant General of the Federation, Director, Budget Office, all inspection companies working for NNPC and the Controller-General of Customs, among others.

    At a news conference to announce the postponement of the hearing, Peterside said the committee was forced to postpone the hearing.

    “We owe you a duty to carry out the investigation; we will not let you down. We want to apologise once more, we will move on with the hearing February 18th,” he said.

    Of those expected to attend the hearing, many will look forward to the session with Sanusi, who while appearing before the Senate Committee on Finance, described kerosene subsidy as illegal, given a presidential directive stopping any form of subsidy on the product. He described kerosene subsidy as a racket.

    He said: “NNPC, in paying what it calls kerosene subsidy, is confessing to a number of serious infractions. First, I have shown, based on Nigerian Bureau of Statistics (NBS) data, that kerosene is not a subsidised product, and therefore the so-called subsidy is rent generated for the benefit of those in the kerosene business. Second, I have produced evidence that the late President Yar’Adua had issued a presidential directive eliminating this subsidy payment as from July, 2009. Third, these huge losses inflicted on the Federation Account have not been appropriated.

    “The burden of proof on NNPC is to show where they obtained authorisation to purchase kerosene at N150/litre from Federation Funds and sell at about N40/litre, knowing full well that this product sells in the market at N170-N220/litre. At what point was the presidential directive reversed? The Nigerian Ports Authority (NPA) records would suggest that NNPC imports about four to six vessels of kerosene a month. Industry sources place the value of each vessel at $30m and the amount of “subsidy” per vessel at $20m. This means, at an average of five vessels a month, the Federation Account loses $100m every month to this racket.”

    Reacting to the CBN governor’s claims, the NNPC said: “Regarding the subsidy claim on kerosene, it is important to note that NNPC as the supplier of last resort is the only company supplying this product in Nigeria for the benefit of the citizenry. If kerosene has been deregulated, why are the independent marketers not supplying this product in line with what is applicable to diesel (AGO)? NNPC owes a duty to Nigerians to ensure that there are adequate products in the country. This mandate has without question been accomplished in the past four years. NNPC deserves to be commended rather than battered, for ensuring adequate supply of kerosene at regulated price of N50. NNPC cannot be held responsible for any differential pricing from non-NNPC retailers. This is the basis for NNPC’s claim on kerosene subsidy.”

    It also denied knowledge of the presidential directive stopping kerosene subsidy. As Sanusi noted, the late President Umaru Yar’Adua, through a memo dated June 17, 2009 to the Minister of Petroleum Resources, directed that subsidy on kerosene be removed, as the continued payments by government did not get to the intended beneficiaries.

    The NNPC claims subsidy

    through a scheme known as

    Kero-Direct initiated in July 2011 to help distribute household kerosene (HHK) to consumers nationwide.

    The House Adhoc Committee on Fuel Subsidy Probe said the scheme may have been a scam to defraud Nigerians and extort money from the Petroleum Support Fund (PSF). Under the scheme, the PPMC, a subsidiary of the NNPC, provided the product sold to end users at N50 per litre, using the facilities of an independent marketer, Capital Oil and Gas Industries Limited. But the committee said the scheme was designed in a way the product would not get to the target beneficiaries at the approved price.

    The committee found that the product sold only at the 36 NNPC mega stations out of the over 24,000 retail outlets across the country. The committee said there was massive diversion of the product, which made consumers to get the product at between N130 and N150 per litre in the market.

    “The Committee could not find any reason why the minister, if convinced on the need to reinstate subsidy on kerosene, did not take any action on that, instead of condoning the illegal payments.

    “When the Ministry of Petroleum Resources discovered that the removal of subsidy on kerosene was not expedient, it should have gone back to the President for the vacation of the directive.

    “Having failed to do that and with the evidence that the product was never sold at N50 (apart from the 36 mega stations) since 2009, there was no basis for seeking any vacation of the order in 2011.”

    The committee’s report asked the NNPC to refund the over N310.42 billion deductions it took as subsidy arrears for kerosene supplied in 2009 and 2010, adding that this was made in spite of a presidential directive to the minister, who is also chairman of the NNPC Board of Directors.

    The committee also criticised the agreement entered into with Capital Oil & Gas Limited for the use of its tank farm to store about 94,330,030 litres of products, which was later confiscated and sold off by the company to recover a nine-month storage fees debt by NNPC.

    Peterside, while speaking at a function organised by the Lagos Chamber of Commerce and Industry (LCCI), said the Federal Government spent N634 billion as subsidy on kerosene between 2010 and 2012, describing this as a network of corruption and fraud.

    He said: “No country that

    spends most of its funds on

    consumption will grow. And so that explains why Nigeria is not moving forward. How can we move forward when most of our funds are spent servicing corruption?

    “Kerosene subsidy is a network of corruption; it is a network of fraud. So why are some people blaming the fraud on the monopoly of NNPC? Even when you ask major marketers they will tell you that the monopoly of NNPC is responsible for what we are going through today to access kerosene.

    “The first challenge is that the supply of kerosene is regulated. Everywhere in the world where there is monopoly, people are likely to suffer while the monopolist tries to maximise the situation; this is because NNPC has the monopoly of importing kerosene.

    “In the year 2010, we spent N110,068,533,988 to subsidise kerosene; this is not the cost of kerosene but the cost of subsidising the product alone…In 2012, although we are yet to reconcile this, we spent N200 billion subsidising kerosene.”

    The NNPC believes unnecessary dust is being raised over kerosene subsidy. Surprisingly, it is also not forthcoming at a hearing meant to settle the matter once and for all. Will it, the ministry and others keep the February 18 date with the Peterside-led committee or will they give excuses again?

     

  • CBN-NNPC tango: deeper in the mire

    CBN-NNPC tango: deeper in the mire

    A man who suffers a protrusion of the belly as he is treated of hernia is doomed. This adage aptly encapsulates the ongoing petro-dollars squabble between the Central Bank of Nigeria (CBN) and the Nigerian National Petroleum Corporation (NNPC). Consider that in the days of yore, it would have been something close to profanity for the apex bank to challenge the government or any of her agencies to a wrestling match of the fiscal kind. It is indeed a strange, if not unimaginable, occurrence in the arcane world of public finance and official revenue accounting.

    But the belly of Nigeria’s economy (not to mention politics) keeps protruding even as remedy is applied to another deadly ailment. As if our jumbled and bloated budget is not wearisome enough, all so suddenly all our government revenue agencies are being stumped by simple arithmetic. As if the oil subsidy mess of 2012 was not grievous enough, NNPC has continued to live up to its billing as the most opaque oil corporation in the world.

    You may accuse the CBN governor, Malam Sanusi Lamido Sanusi of loquaciousness and even playing to the gallery but you won’t quarrel with his whistle-blowing on the NNPC. If only because of the fact that the corporation has become an obdurate monster inured to any gently prodding. Which Nigerian does not know that our oil giant is a house of corruption? In the last three decades or so, NNPC has morphed from an oil giant that was to lead Africa and the emerging markets to a badly diminished, nondescript entity that has no place among even its top African peers. What Sanusi is trying to reveal is what we have written about almost every year and every season over this period.

    While Nigerians are still smarting from the $10.7 billion NNPC’s missing revenue according to Sanusi, the apex bank chief last week came up with even a larger figure of $20 billion. Appearing before the Senate Committee on Finance investigating the alleged non-remittance of earnings to the Federation Account, Sanusi armed with a 20-page document which has a separate 30-page appendix said:

    “We have provided evidence in the naira crude account that out of the $28 billion domestic crude shipped by the NNPC, it had repatriated $16 billion. Out of the $67 billion that has accrued to the NNPC account, we have accounted for $47 billion.

    “That is, out of the $67billion that NNPC shipped, $47 billion had been repatriated to the CBN. What we are talking about is the balance of $20 billion and what explanations had been given.” He said further: “I have submitted to this committee, written evidence of a presidential directive eliminating subsidy since 2009 and the NNPC needs to provide its authority for buying kerosene at N150 and from the federation account and selling at N40, and inflicting that loss on the federation.”

    NNPC’s Group Managing Director, Mr. Andrew Yakubu retorted that they were about concluding reconciliation which detailed report would be submitted to the committee: “That is where we are and what we reported is the true position of things; we are at the point of concluding our reconciliation, and as you are aware, the major chunk of the amount in question, over 80 per cent of it is in the subsidy for both PMS and kerosene,” he said.

    From the foregoing, it is apparent that we are confronted with the same old muddled- up graft story; the more you try digging (for facts), the more you sink deeper in the mire.

  • Okorocha seeks probe of NNPC’s missing fund

    Okorocha seeks probe of NNPC’s missing fund

    IMO State Governor Rochas Okorocha has urged the Institute of Chartered Accountants of Nigeria (ICAN) to investigate the Nigerian National Petroleum Corporation (NNPC) over the alleged non-remittance of $20 billion to the Central Bank of Nigeria (CBN).

    Okorocha spoke in Owerri, the state capital, when he received the National Executive Members of ICAN at the Government House.

    The governor described ICAN as one of the most critical professions that could reduce corruption and misappropriation of public funds in the society.

    He urged the body to intervene in the financial problems facing the nation, especially unaccounted funds in some organisations.

    Okorocha said he was ready to partner the institute to establish a befitting secretariat in the state.

    He hailed members of the institute for their decision to build a secretariat in Imo State and promised to provide the land and financial assistance to realise the project.

    ICAN President Kabir Alkali Mohammed hailed the governor for his exemplary leadership style.

    He said the governor was dedicated to the collective interest of the people and committed to honesty, transparency and accountability.

     

    He extolled the Governor for appointing some members of their Institute in his cabinet and appealed for more of such appointments.

    Kabir, who stated that they were on tour of the 48 District Societies of the Institute to strengthen professionalism, disclosed that the strategic position of Owerri in the Southeast region of the country necessitated the Institute’s resolve to build a secretariat in Owerri.

    He said the secretariat would provide such facilities as conducive examination halls, library services for the students and offices.

    The ICAN boss further solicited the state government’s assistance in providing a plot of land and logistics to facilitate the building.