The Nation Newspaper

Tag: PMS

  • Alison-Madueke: no plan to hike fuel price

    Alison-Madueke: no plan to hike fuel price

    The Federal Government has no intention of increasing the pump price of Premium Motor Sprit (PMS), the Minister of Petroleuem Resources, Diezani Alison-Madueke, has said.

    The minister spoke yesterday while defending the 2014 budget proposal of her ministry before the House of Representatives Committee on Petroleum Resources (Downstream). She added that the fuel scarcity being experienced across the country would abate within two weeks.

    She said: “There was also some strange rumor that the Ministry of Petroleum Resources was going to announce an increase in the pump price of petrol which also helped to instigate some of the hoarding and some of the diversion.

    “And I have said categorically over, and get that, we have no plans to increase the pump price of petrol anytime in the near future.

    “The issues of supplies, more and more PMS is being brought in and over the next week or two we would flood the country with the product.

    “And in terms of the diversions we would try and ensure that whichever stations we find to have actually diverted or hoarded the produce, we will take them up and implement punitive measures no matter which stations they are, whether they are NNPC stations or any other stations, independent or otherwise we will take them up to face the full extent of the law.”

    Besides, the ministry has begun an inquiry into the fuel scarcity, she told the lawmakers, saying: “It was quite obvious that it could be caused by a number of things that we are looking into.

    “There is some supply hitch which we are looking into, there is also diversion which was quite clear. There was an element of hoarding as well.

    “While we are trying to get to the bottom of who diverted what at the same time in terms of supply, we are trying to ensure that over the next week we flood the country with petroleum products”.

    According to her, the ministry proposed to spend N6.221b on capital projects across its agencies and departments in contrast to N8b appropriated for the Ministry and its agencies in 2013.

    N53.8b was proposed for personnel cost while N1.85b was allocated to overhead.

    The break down showed an increase in the personnel cost from the 2013 budget’s of N50.483b to N53.8b in 2014 budget provision, while the overhead cost maintains same figure of N1.85b for the two years.

    “We will work to overcome challenges particularly on the revenues accruing to the Federation Account,” she assured the Committee.

    A member of the Committee, Bala Yusuf (APC, Kaduna), however, walked out of the session for not being given enough time to scrutinise the budget document.

    It was gathered that the lawmaker complained that enough time was not given to properly scrutinise the document that was submitted to the Committee on the day of the defence against the norm.

    He walked out of the session, when it became apparent that the Committee was willing to go on with the session.

     

  • Panic over leaking petrol in Lagos community

    Panic over leaking petrol in Lagos community

    There was pandemonium yesterday at Isheri, a Lagos suburb following a petroleum pipeline leakage that caused a pool of fuel.

    Residents around Iyana-Odo Bus stop, on LASU-Iyana-Iba Road raised the alarm after they discovered that their ground was soaked with Premium Motor Spirit (PMS) leaking out of a Nigerian National Petroleum Company (NNPC) pipelines.

    According to an eyewitness, some of the residents for fear of being consumed by fire, scampered for safety. Others made efforts to contact the appropriate agencies.

    Members of the community wondered where the PMS emanated from.

    The eyewitness said: “We suddenly realised that the ground was soaked with PMS such that the fuel formed a pool but we did not know the source.

    “Obviously, it may have leaked from underground pipe and would have been leaked for so long to soak everywhere like that.

    “We could not reach the NNPC nor emergency agencies till about 3:30pm and they came and closed the valve.

    “Also fire service officials were onground to neutralise the petrol to avoid inferno,” the source said.

    The Southwest zonal spokesman of the National Emergency management Agency (NEMA), Ibrahim Farinloye said the NNPC has confirmed there was a leakage between Idimu and Diamond Estate in Lagos.

    “This is to allay fears of alleged explosion making the round. The supply sources and valves have been shut by NNPC staffers from satellite town this evening,” he said.

    Confirming the incident, Director, State Fire Service, Rasaq Fadipe said they got an alert around 3:45pm.

    Although the cause of the leakage could not be readily ascertained, Fadipe said it could have emanated from defective valves.

    “The leakage was underground and it soaked the whole place with fuel and resulted in a pool of fuel. NNPC officials were on ground to contain the situation. They locked up the valves.

    “We were able to go round the community to sensitise the people to avoid cooking or lighting matches.

    “Also, we temporarily closed all mechanic workshops in the area to avoid fire outbreak.

    “Then, we used foam chemicals to neutralise the PMS and condoned off the area,” Fadipe said.

    He added that the fire service also averted another inferno on Ajuwon-Akute Road, after a tanker laden with 33,000 litres of PMS rammed into a stationed car.

    He said the trailer marked XY154SMK was descending a hill and suddenly lost control before ramming into a stationary Toyota Camry with registration number LSD583AZ.

    “We immediately got to the place as PMS was spilling into a nearby carnal. Then, another vehicle was brought to transload the product while we neutralised the fuel to avoid disaster,” he said.

    Advising articulated vehicle owners to ensure they purchase 9kg dry chemical powder fire extinguisher for their vehicles as first aid measures in case of an emergency, Fadipe urged them to employ literate drivers who can read and understand road signals.

    here was pandemonium yesterday at Isheri, a Lagos suburb following a petroleum pipeline leakage that caused a pool of fuel.

    Residents around Iyana-Odo Bus stop, on LASU-Iyana-Iba Road raised the alarm after they discovered that their ground was soaked with Premium Motor Spirit (PMS) leaking out of a Nigerian National Petroleum Company (NNPC) pipelines.

    According to an eyewitness, some of the residents for fear of being consumed by fire, scampered for safety. Others made efforts to contact the appropriate agencies.

    Members of the community wondered where the PMS emanated from.

    The eyewitness said: “We suddenly realised that the ground was soaked with PMS such that the fuel formed a pool but we did not know the source.

    “Obviously, it may have leaked from underground pipe and would have been leaked for so long to soak everywhere like that.

    “We could not reach the NNPC nor emergency agencies till about 3:30pm and they came and closed the valve.

    “Also fire service officials were onground to neutralise the petrol to avoid inferno,” the source said.

    The Southwest zonal spokesman of the National Emergency management Agency (NEMA), Ibrahim Farinloye said the NNPC has confirmed there was a leakage between Idimu and Diamond Estate in Lagos.

    “This is to allay fears of alleged explosion making the round. The supply sources and valves have been shut by NNPC staffers from satellite town this evening,” he said.

    Confirming the incident, Director, State Fire Service, Rasaq Fadipe said they got an alert around 3:45pm.

    Although the cause of the leakage could not be readily ascertained, Fadipe said it could have emanated from defective valves.

    “The leakage was underground and it soaked the whole place with fuel and resulted in a pool of fuel. NNPC officials were on ground to contain the situation. They locked up the valves.

    “We were able to go round the community to sensitise the people to avoid cooking or lighting matches.

    “Also, we temporarily closed all mechanic workshops in the area to avoid fire outbreak.

    “Then, we used foam chemicals to neutralise the PMS and condoned off the area,” Fadipe said.

    He added that the fire service also averted another inferno on Ajuwon-Akute Road, after a tanker laden with 33,000 litres of PMS rammed into a stationed car.

    He said the trailer marked XY154SMK was descending a hill and suddenly lost control before ramming into a stationary Toyota Camry with registration number LSD583AZ.

    “We immediately got to the place as PMS was spilling into a nearby carnal. Then, another vehicle was brought to transload the product while we neutralised the fuel to avoid disaster,” he said.

    Advising articulated vehicle owners to ensure they purchase 9kg dry chemical powder fire extinguisher for their vehicles as first aid measures in case of an emergency, Fadipe urged them to employ literate drivers who can read and understand road signals.

     

  • NNPC releases 33 million litres of petrol for Lagos

    NNPC releases 33 million litres of petrol for Lagos

    In its determination to ease the discomfort being experienced by motorists and commuters in Lagos and its environs, the Nigerian National Petroleum Corporation (NNPC) yesterday supplied an additional volume of 33 million litres of  Premium Motor Spirits (PMS) to the Major Oil Marketers Association of Nigeria (MOMAN) for onward distribution to fuel stations across the metropolis.

    Acting Group General Manager, Group Public Affairs Division of the Corporation, Dr. Omar Farouk Ibrahim stated in a statement that the extra volume of 25, 000 metric tonnes of fuel, the equivalent of 33 million litres of petrol  was supplied to the marketers  as part of measures by the oil giant to end the artificially- induced scarcity.

    “While we intensify our ongoing direct monitoring of fuel stations across Lagos and its environs, we are providing the extra volume of product to eliminate the noticeable queues arising from the induced scarcity,’’ Dr. Ibrahim stated.

    The NNPC appealed to marketers and members of the public to refrain from hoarding and panic buying.

     

  • 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.”

     

     

  • The limits of criticism

    The limits of criticism

    There is more to the scandalous exposure of the CBN Governor Sanusi Lamido Sanusi as a false whistle blower on the supposedly untidy accounting books of the nation’s petroleum sector than a section of the Nigerian Press wants us to believe.

    Ordinarily, the sensational letter from the CBN Governor to the President raising worrying issues indicating the diversion of earnings from the lucrative crude oil sales by the NNPC is a classical scoop that no newspaper will fail to publish under banner headlines. In this case both the message and the messenger combine to lend credence to the typical Nigerian hear-say and the added spice of a leaked letter could only have proved irresistible to even the most conservative of editors.

    So on the face of it, the media splash of screaming headlines and crusading editorials literally canonizing the CBN Governor for such a patriotic spilling of the beans and simultaneously bashing not just the NNPC but the entire Goodluck Jonathan Presidency, was to be expected.

    With the House Speaker’s blame game on corruption and former President Obasanjo’s hell-raising letter all hitting the headlines within a few days interval, it was indeed the opposition’s delight.

    However, the post-leakage euphoria was dramatically deflated when the Sanusi Lamido Sanusi, CBN Governor made a straight-faced admission of willful exaggeration and inexcusable negligence of official responsibility following the humiliating outcome of a rather belated reconciliation of accounts that provided damning evidence of the CBN Governor’s dishonest flippancy.

    By professional reckoning, the news value of the initial leaked letter from the CBN Governor was just as sensational as his self-indicting factual somersault before the Senate which confirmed not only that the CBN Governor misled the nation but that he did so in spite of having the facts of the matter right under his nose.

    The Press that was also clearly culpable, as the chosen weapon of mass deception by flagrant disregard of the ethics of news reporting, should have been more outraged by this fiasco than the initial “scoop” that never was. Instead, it was as if the news instincts of the editors had been suddenly turned off. Those that reported the CBN Governor’s gaffe at all tucked into inconspicuous portions of their reports, others callously stuck to the CBN Governor’s discredited whistle-blowing posturing.

    Such a bizarre twist in professional standards of news reporting and brazen adoption of bias and prejudice as hallmarks of journalism was most distasteful coming from leading newspapers that flaunt pious slogans of objectivity and fearlessness on their mastheads.

    For the avoidance of doubt, the Press deliberately played down the unpatriotic excesses of the CBN Governor who sought to out-do the political opposition in their tendency to smear and sleaze the incumbent President and government and all agencies of government more often than not, without justification.

    The incontestable fact is that the reconciliation process including the CBN Governor was satisfied that there was nothing like a 49.8 billion dollars of unremitted proceeds from crude oil sales diverted by the NNPC from the federation account. It was also confirmed that the CBN is in possession of the accounts into which the remittances were duly paid but ignored them for reasons yet to be explained by the CBN Governor.

    As if this attitude is not bad enough, weeks after the CBN Governor has himself expressed remorse over his indiscretions and the sensational press hullaballoo forced into acquiescence by the share weight of corrective information, some newspapers would still rehash discredited statements disowned by the author – the CBN Governor.

    Discerning Nigerians were aware that the 12 billion dollar figure was not only corrected to about 10.8 billion dollars by the Coordinating Minister of the Economy Ngozi Okonjo Iweala, but further clarified to represent the amount yet to be reconciled at the time of the briefing to the Senate Committee but certainly not “missing.” The needless controversy was CBN Governor’s tactless face-saving effort following his admission that his phantom figure of 49.8 Billion dollars was in fact a huge misinformation that the minister promptly debunked with convincing finality.

    The NNPC has declared that by the time the reconciliation process is completed, it will be established that the amount represents some of the responsibilities that it carries out on behalf of the federal government such as the unpaid subsidies on kerosene and premium motor spirit (PMS). Dr. Okonjo-Iweala was earlier reported to have stated that no subsidy on kerosene has been paid since she assumed office.

    It is also on record that since January 2012, NNPC has been importing a bulk of the PMS used in the country as most of the private oil marketing firms stopped importing the product. NNPC has successfully kept the nation well stocked with products, especially PMS, these past two years and the national budgets in the period did not capture subsidy to the corporation.

    Similarly, the NNPC is required to maintain huge petroleum products reserves in the national territorial waters as strategic reserves in the national interest and at the rate of 40 million litres of PMS national consumption per day, NNPC currently maintains 32 days’ sufficiency of products. The cost of pipeline vandalism and oil theft are security issues affecting over 5000 kilometers of pipelines across the country on which NNPC expends huge resources on pipeline protection and repairs, operational downtime and outright revenue loss from crude oil and product theft and willful spillage. All these make up the yet-to-be-reconciled balance of $10.8bn known to all the parties in the reconciliation process.

    With all this verified information in public circulation for weeks, it is incomprehensible that some newspapers will adamantly continue dishing out the falsehood. Sadly, there is little or no hope that the errant fringes of the Nigerian Press can be called to order in what is clearly a disservice to the citizenry. The wise citizens should therefore protect themselves from press freedom without responsibility henceforth.

    • Gwazuwang, a petroleum industry watcher wrote from Abuja.

  • Alleged N2b subsidy scam: Police declare oil firm MD wanted

    The Commissioner of Police, Special Fraud Unit, Ikoyi in Lagos, Mr Tunde Ogunsakin, has declared wanted the Managing Director of Fargo Petroleum Limited, Seun Ogunbambo, for alleged fuel subsidy payment fraud.

    Ogunbambo was declared wanted following a petition by the Presidential Committee on Verification and Reconciliation of Fuel Subsidy Payments.

    The police said the businessman “fraudulently arranged forged documents” with which he applied and received payment of over N2 billion as subsidy claims.

    The petition alleged that Eurafric Oil and Coastal Services Limited was granted permit to import PMS (petrol) between 2010 and 2011. The company allegedly claimed that it imported 85,519,068 litres of petrol in six transactions.

    It was gathered that it applied for payment and was given N6,130,006,149.30 by the Federal Government.

    The police said it was discovered that Eurafric did not execute the transaction. Rather, it allegedly traded off the permit to a third party, Tubbs Marine Services Limited, for N65 million.

    Ogunbambo, who allegedly operated with the licence of Tubbs Marine Services, reportedly failed to import any product.

    The police said Ogunbambo was on the run and that efforts were unsuccessful to contact him at his 2, Olamijuyin Avenue, Parkview Estate, Ikoyi, and 95 Awolowo Road, Ikoyi, Lagos.

    Ogunsakin said: “He is wanted by the Office of the Commissioner of Police in charge of the Special Fraud Unit at 13 Milverton Road, Ikoyi, Lagos.

    “Anybody with information should contact the SFU, 13 Milverton Road, Ikoyi, Lagos.”

  • Ghost subsidy

    Ghost subsidy

    •Kerosene subsidy scam may be Nigeria’s next scandal

    Just as it was with the much-talked-about petrol subsidy last year, we may yet be on the way to unearthing another scam, this time, on kerosene subsidy. The Chairman, House Committee on Petroleum, Downstream, Dakuku Peterside, said that the Federal Government spent about N634billion to subsidise kerosene in the last three years. Peterside spoke at a seminar organised by the Lagos Chamber of Commerce and Industry (LCCI), in Lagos. According to him, about N110 billion was spent on kerosene subsidy in 2010; N324 billion in 2011 and N200 billion in 2012.

    This, no doubt, must have come as a rude shock to Nigerians because, as Peterside himself noted, the subsidy has never benefitted Nigerians who have been suffering due to the fact that they cannot get the product at the regulated price. Kerosene is supposed to sell for N40.90k per litre, but it is presently going for between N110 and N150. Senator Bukola Saraki who had expected the Minister of Finance and Co-ordinating Minister of the Economy, Dr Ngozi Okonjo-Iweala, to shed more light on the subsidy at her meeting with the Senate Joint Committee on Finance and Appropriation on the 2013 Budget last Monday was disappointed because the minister was evasive on the issue.

    The minister, rather, insisted that the N1.4trillion she told the joint committee about was the amount paid to oil marketers as subsidy on Premium Motor Spirit (PMS), otherwise known as petrol. When Senator Saraki persisted, she simply retorted, “the payment is for petrol; it does not include kerosene. I said the payment is for PMS and that is petrol, adding: “I am really very clear that the payment is for petrol. I think the NNPC should answer the question on whether subsidy is paid on kerosene.”

    We do not want to believe that Dr Okonjo-Iweala does not know whether we are paying subsidy on kerosene or not; although we agree she might not know the exact amount involved immediately. In which case all she needed to do was ask for more time to find out details and get back to the committee.

    We would not be surprised if another can of worms is opened by the time the lawmakers probe the matter further. Those involved in the kerosene subsidy racket might have been taking undue advantage of the fact that we hardly talk about it. With the ball now put in the court of the untouchable behemoth, the Nigerian National Petroleum Corporation (NNPC), the matter seems to have got to a dead end. As at now, the corporation is the sole importer of kerosene and we do not know anything that it has done well. It is under its watch that the country, the world’s sixth biggest crude exporter, imports the bulk of its petroleum products because the corporation cannot efficiently run our refineries.

    It is sad that the government spends about a third of what we spend on capital budget yearly on kerosene subsidy, which, like petrol subsidy, is subsidising corruption because the subsidy is not getting to the intended beneficiaries. It is true that Nigerians could switch over to Liquefied Petroleum gas (LPG) instead of kerosene as Mr Peterside suggested, but how many of our low and middle income earners can afford this? Cost apart, many people, particularly in the rural areas, do not feel comfortable with gas cookers. They will rather switch over to firewood if kerosene is no longer within their reach. This, as we know, has deleterious effects on the environment.

    We agree with Mr Peterside that “… something is wrong somewhere. How can we be spending on what does not benefit the masses”? It is that something that the lawmakers should unearth since the government has persistently shown a gross incompetence when it comes to tackling corruption.

     

  • ‘Missing’ N500b…SURE-P in stormy waters

    ‘Missing’ N500b…SURE-P in stormy waters

    Who owns SURE-P? That is the question raised following the claim by the Senate that N500 billion SURE-P fund was missing. The Minister of Finance, Budget Office and the Nigerian National Petroleum Corporation (NNPC) have all washed their hands of the programme initiated to utilise savings from the partial removal of subsidy on Premium Motor Spirit (PMS) in 2012. Nduka Chiejina reports.

    One of the agenda of the Federal Government is the progressive deregulation of the petroleum industry, which gave birth to the Subsidy Reinvestment and Empowerment Programme (SURE-P). It was established January last year by President Goodluck Jonathan after the subsidy from Premium Motor Spirit (PMS) was partially removed.

    The Occupy Nigeria protest took centre stage to protest the hike in pump price of fuel from N65 to over N141, before it was reduced to N97, after negotiation between the Organised Labour and the Federal Government.

    The SURE-P was set up as an interventionist committee to manage the proceeds from fuel subsidy removal. It is funded with the difference or the savings which would have used to subsidise PMS had there been full subsidy for the product. By implication, the difference between N65 per litre cost of PMS as full subsidy and N97 the price of PMS from partial withdrawal of subsidy is what the government uses to fund SURE-P. The money thus saved is shared among the three tiers of government.

    In order to ensure the proper management of the funds that would accrue to the Federal Government from the partial withdrawal of subsidy, the government decided to inaugurate a committee for the purpose.

    Accordingly, the President set up the SURE-P Committee, with Dr. Christopher Kolade as Chairman.

    The mandate from the President to the SURE-P Committee is to ‘deliver service with integrity’ and ‘restore people’s confidence in the government’. The terms of reference are as follows: Determine in liaison with the Ministry of Finance and Ministry of Petroleum Resources, the subsidy savings estimates for each preceding month and ensure that such funds are transferred to the Funds’ Special Account with the Central Bank of Nigeria; approve the annual work plans and cash budgets of the various Project Implementation Units (PlUs) within the Ministries, Departments and Agencies (MDAs) and ensure orderly disbursement of funds by the PlUs in order to certify and execute projects; monitor and evaluate execution of the funded projects, including periodic Poverty and Social lmpact Analysis (PSIA); update the President regularly on the programme; Periodically brief the Federal Executive Council (FEC) on the progress of the programme; appoint Consulting firms with international reputation to provide technical assistance to the Committee in financial and project management; appoint external auditors for the fund; and do such other things as are necessary or incidental to the objectives of the Fund or as maybe assigned by the Federal Government.

    The Committee is supported by a Secretariat that will also be responsible for communication and press briefings.

    Fund Management

    SURE-P, in carrying out the set mandate of reinvesting the Federal Government’s share, established a fund management structure. In the structure, the Director-General, Budget Office of the Federation (Director-General, Budget Office) is designated as the Accounting officer for all SURE-P activities. The Account of the programme is, therefore, domiciled in the Office of the Director-General, Budget Office of the Federation.

    After the Committee has approved payments for projects, the Chairman signs the approval, then the DG Budget Office, as Accounting Officer, processes the approvals, after which the Central Bank of Nigeria (CBN) makes payments directly to beneficiaries.

    Programme Structure

    In line with the adopted operational structure, individual projects are managed by Project Implementation Units (PIUs) that are located within Federal Government Ministries, Departments and Agencies (MDAs). Projects and programmes oversight are managed by the SURE-P Committee working through its steering committee and seven subcommittees. This aspect of the SURE-P programme structure has been described as drain pipe of public funds as it is seen as a duplication of the duties and functions of MDAs with regards to project management.

    The subcommittees are extensions of the committee to provide direct supervision to the projects. The Committee also has a Secretariat that provides technical and administrative support to both the Committee and its subcommittees, and provides information to stakeholders and the general public.

    By the end of November 2012, N62, 423,351,736.58 had been expended on capital projects; N325,525,292.27 went into the committee’s running cost (secretariat services).

    The expenditure summary shows that maternal child health by federal ministry of health gulped N3,803,152,276.13; public works by FERMA used N4,000,000,000.00; mass transit by infrastructure bank, went away with N8,900,000,000.00; East-West Road by ministry of Niger Delta equally gulped N8,148,855,134.04; N28,296,238,063.10 was spent by federal ministry of Works on roads and bridges; Railway by federal ministry of Transport received N9,275,106,263.31 and N325,525,292.27 was spent on Secretariat services by SURE-P, bringing the total to N62,748,877,038.85.

    In 2014, N273.14 billion has been budgeted for extra capital under the SURE-P scheme to further complement the overall capital outlay in 2014. According to the 2014-2016 Medium Term Fiscal Expenditure Framework (MTEF) and the Fiscal Strategy Paper (MTEF and FSP) document, “the SURE-P budget is added to the outlay in the regular budget, the consolidated expenditure rises to N4.77 trillion, of which the consolidated capital budget in 2014 is N1.45 trillion (about 30.44 per cent of total expenditure).”

    N35,549,000,000 was shared from the Subsidy Reinvestment and Empowerment Programme (SURE-P) by all the tiers of government so far, and as Nigeria’s gross monthly revenue continues to dwindle, state governments have advised the federal government to invest some of the Subsidy Reinvestment Empowerment Programme (SURE-P) funds into petrochemical industries.

    The advice was given to the federal government following what the states called lack of proper and full harnessing of Nigeria’s resources.

    The Senate alleged last week that N500 billions missing from the SURE-P funds as only N300billion of the estimated accruals of N800 billion could be accounted for. This is not the first time SURE-P funds have been declared missing. The Plateau State House of Assembly recently said it discovered over N3 billion unspent SURE-P fund in the state since January 2012.

    The Chairman of the House Ad hoc Committee on the Subsidy Reinvestment and Empowerment Programme, Mr Dalyop Mancha, said the committee discovered that both the State and Local Governments attracted fund from the SURE-P since January 2012, which the two tiers did not disburse to the beneficiaries.

    The state finance commissioner was said to have told state legislature that “the funds were intact and that the account have so far received the sum of over N3 billion arising from a monthly allocation of N218 million”.

    However, no government agency wants to own up to having control over SURE-P. Officials of the Budget Office of the Federation, the agency mandated to serve as the account hub of SURE-P said they could not speak concerning SURE-P citing civil service hierarchy and pointing squarely to the office of the minister of finance which supervises the office.

    But when Prof. Kame Okonjo was kidnapped, her daughter and Minister of Finance Dr. Ngozi Okonjo-Iweala said “with regards to the case of SURE-P, there is a totally different process that I have no control over”.

    An official of the Budget Office told The Nation that they do not have up to 50 per cent of the purported N800 billion and accused the Senate of distracting the office from promptly preparing the 2014 budget prior to the President’s submission to the National Assembly with claims of the missing N500 billion. They refused to be dragged into the debate over the whereabouts of the N500 billion until they have concluded work on the 2014 budget.

    The officials of the office said they work with what the Nigeria National Petroleum Corporation (NNPC) remits to it and any claims of missing funds should be directed to the NNPC. They also wondered if the N800 billion allegedly funneled to SURE-P was for the three tiers of government or for the Federal Government alone.

    As at September 2013, the Federal Government said it had paid out N25 billion to contractors handling the Subsidy Reinvestment and Empowerment Programme fund (SURE-P) projects.

    This disclosure was made by the SURE-P office in Abuja, which also revealed that the SURE-P committee has approved the appointment of workers supporting the programme on Maternal and Child Health in some states.

    The contractors, who benefited from the N25 billion pay out include Dantata and Sawoe construction company for handling the Abuja-Abaji-Lokoja road (Abuja-Sheda junction) and the 510 kilometre Kano-Maiduguri (Kano-Wudil-Shuarin) road dualisation scheme.

    Also paid was the China Civil Engineering Construction Company (CCECC) for handling the rail project running from Idu-Kaduna and the Jebba-Kano rail line rehabilitation.

    Other companies paid for the SURE-P projects according to the programme’s office in Abuja were Messers Raynold Construction Co for work on the East-West road section 3 (Port Harcourt-Eket) and Benin-Ore-Shagamu section 1.

    Reserved West Africa was paid for the work on the Eastern rail line projects from PortHarcourt-Markurdi and Nigeria Construction Limited for the Enugu-Onitsha road dualisation.

    Costain West Africa was paid for work done on the railway rehabilitation from Jebba-Kano and Messers Gitto Construzioni for the work on the Abuja-Lokoja road.

    According to Senator Kabiru Marafa (Zamfara, APC), a member of the SURE-P Senate committee, N800 billion had been generated so far from subsidy as against N300 billion claimed by SURE-P.

    Marafa said: “This committee wrote to the relevant organisations that benefit from this SURE-P when it was inaugurated. It was said that the subsidy regime was going to be N32 a litre and this committee wrote the NNPC to ascertain the quantity of fuel being imported from the time this subsidy programme started.

    “NNPC replied the committee that from January 2012 to December 2013, which if you calculate it will give about 21 months… they gave a breakdown of the quantity per month. When you put up everything, it comes to roughly 25 billion litres per month.

    “Now, if you multiply 25 billion by 32, you get about N800 billion, and what SURE-P told us when they came here when we invited them was that they collected about N300 billion at N15 billion flat rate per month. So if you multiply 21 by 15 billion, you will get about N315 billion. So what we are talking about is the amount involved, which is N500 billion, where is it? That is what we wanted NNPC to tell us.”

    The NNPC has absolved itself from the SURE-P allegations. The corporation described the allegation linking it to the Sure-P budget as a comprehensive falsehood, noting that the Corporation has no connection whatsoever with the disbursement and appropriation of funds to the Sure-P Committee.

    In a statement last Wednesday by the Acting Group General Manager, Tumini E. Green, the NNPC said Sure-P budget is managed by a Committee made up of eminent Nigerians.

    It said: “NNPC is neither a member of the Sure-P Committee nor does it pay any money into the Sure-P account for any reason whatsoever. The budget is the responsibility of other requisite statutory authority. The committee superintends over the disbursement and the execution of the various social welfare projects.”

    Not a few have also queried some SURE-P projects. Some of the programmes are considered not to have direct impact on the people. In a state, SURE-P fund is said to have been used to buy donkeys. “That is scandalous in this age”, said a source.

    In Niger State, has concluded move to partner with the Niger State Development Company (NSDC) to construct a Three Star Hotel at the cost of N436 million.

    The state SURE-P Director General, Alhaji Hassan Nuhu, said the effort was initiated to create employment for youths.

    He said contract for the hotel had been awarded to Fourth Dimension Limited, adding the project was expected to be completed in 10 months and handed to the state government.

    Nuhu said: “The contract has been awarded to a reputable firm that has track record of performance for the construction of a Three Star Hotel to add value to Justice Idris Legbo Kutigi Conference Centre.”

    Under the arrangement, the SURE-P will provide 70 per cent of the cost while the Niger State Development Company will provide 30 per cent balance of the cost of the project.

    He said: ” But we will not embark on any ground breaking ceremony, rather we have instructed the contractor to keep the work schedule so that the project is completed with the 10 months period effective from October 1, 2013 so that the July 2014 handover and inauguration date is achieved.”

  • Budget Office: N500b not missing from SURE-P

    Budget Office: N500b not missing from SURE-P

    THE Budget Office of the Federation has said N500 billion is not missing from the Subsidy Reinvestment and Empowerment Programme (SURE-P) account as alleged by the Senate.

    An official of the Budget Office said the office don’t have up to 50 per cent of the amount in its books.

    The source accused the Senate of distracting the Office from preparing the 2014 budget prior to the President’s submission to the National Assembly on Tuesday.

    The Budget Office refused to be drawn into any debate over the whereabouts of the money until they have concluded work on the nnext year’s budget.

    The officials of the Budget Office, the agency which serves as the accounting hub for SURE-P, said they would not speak on the matter citing civil service rules.

    They said the office works with whatever the Nigeria National Petroleum Corporation (NNPC) remits to it and that any claims of missing funds should be directed to the oil giant.

    They also asked if the N800 billion allegedly funnelled to SURE-P was for the three tiers of government or the Federal Government alone.

    The SURE-P was set up by President Goodluck Jonathan, as an interventionist committee to manage the proceeds from fuel subsidy removal.

    It is funded with the difference or the savings which would have been used to subsidise imported premium motor spirit (PMS) had there been full subsidy for the product. By implication, the difference between N65 per litre cost of PMS as full subsidy and N97 the price of PMS from partial withdrawal of subsidy, is what the government uses to fund SURE-P. The money saved is shared among the three tiers of government.

    However, SURE-P in carrying out the mandate of reinvesting the Federal Government’s share, established a fund management structure. In the structure, the Director-General, Budget Office of the Federation (DG Budget Office) is designated as the accounting officer for SURE-P.

    The account of the programme is, therefore, domiciled in the Office of the Director-General, Budget Office of the Federation.

    After the committee has approved payments for projects, the chairman signs, then the DG Budget Office, as the accounting officer, processes the approvals, after which the Central Bank of Nigeria (CBN) makes payments to beneficiaries.

    On the annual budget, it has been revealed that some measure of politicking influences budget implementation in some states. Another source at the Budget Office, admitted that more capital projects included the budget are executed in states controlled by the ruling party than in those controlled by the opposition.

    He said only a fraction of the capital projects in the budget for states controlled by the opposition party are executed by the Federal Government, noting that in some cases, funds for the projects in opposition held states are diverted to projects in states controlled by the ruling party.

    This development may not be unconnected with the persistent poor performance of the budget, which has been a source of friction between the executive and the legislature. This admittance from the corridors of the executive arm of government raises questions about budget implementation.

  • Nigeria consumes 39.66m litres of petrol daily

    Nigeria consumes 39.66m litres of petrol daily

    The Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, has said the country consumes 39.66 million litres of Petroleum Motor Spirit (PMS) daily.

    She said the volume of petrol consumption has reduced by 34.17 per cent within a short period of time.

    Mrs. Alison-Madueke, who spoke in Abuja, said the subsidy has reduced by 59.05 per cent to N850 billion, adding that the government spent N5.27 trillion on petroleum products between 2006 and last year.

    She said: “As at December 2012, N5.27 trillion has been expended on products subsidy since the commencement of Petroleum Subsidy Scheme in 2006. A comprehensive reform programme put in place, under the Minister of Petroleum Resources, yielded outstanding results in 2012.”

    She said the industry reform was in line with the government’s transformation agenda to promote socio-economic activities.

    The reform initiatives, she said, are aimed at restoring effective product monitoring, enhancing transparency and accountability, restoring the integrity of the products importation and volume determination process, changing the negative perception of the sub-sector, especially of the Petroleum Product Price Regulatory Agency (PPPRA), among others.

    Mrs. Diezani said the reforms between 2010 and this year covered the downstream, midstream and upstream, among other areas in the oil and gas value chain.

    She said the ministry was repairing and upgrading facilities in the refineries and pipelines distribution network to sustain in-country product supply

    She maintained that the ministry would continue to ensure stable supply of petroleum product, effective and efficient administration of the subsidy programme which she said remains unsustainably expensive and increased domestic refining

    In addition, she said, improvements in local capacity and indigenous participation in infrastructure investments had been vigorously pursued, saying the outcome had been in upgraded training facilities and increased regulatory compliance with local content requirements

    The ministry in line with government drive in achieving the national aspiration of 40 billion barrels of oil reserves and four million barrels of oil per day production, including condensate, as captured in Vision 20:2020, has increased exploration activities in the offshore, onshore and Inland basins.

    Meanwhile, exploration has been stepped-up in the inland basins of Chad, Anambra, Benue and Bida/Sokoto/Dahomey, she disclosed.

    According to her, last year, 19 exploration wells were drilled comprising eight exploration wells in the JV and 11 wells (3 exploration and 8 appraisal wells) under the PSC. Also, 93 development wells were drilled including 55 development wells under JV while PSC delivered 38 development wells.

    Within the same year, 33 work- over wells were drilled consisting of 32 work-over wells under JV and one work-over well in PSC

    This increased exploration activity is reflected in acquisition of a total of 6, 102 sq.km of seismic data, including 818 sq.km acquired for FES operations in the Chad Basin in Phase 3, 4 and 5 combined.

    She said acquisition of 266sq.km of seismic data in the Phase 6 is ongoing by IDSL (a subsidiary of NNPC) in the Chad Basin.

    In addition, the ministry has also grown IDSL Land Acquisition capacity by additional three 100percent wholly owned seismic party crews, she said, adding that all these are in line with realising the objectives of the present administration.