The House of Representatives is currently probing the alleged rot in the country’s oil industry through its committees where some shocking revelations are recorded, reports KOLAWOLE DANIEL.

Following the announcement by the Petroleum Products Pricing Regulatory Agency (PPPRA) on January 1 about Federal Government’s decision to phase out fuel subsidy and the announcement of N141 per litre of petrol as against the previous N65 per litre, the development jolted most stakeholders as the organised labour and some civil society organisations threatened a show-down if the government made good its position to remove the fuel subsidy.

With the development, the House of Representatives quickly moved in ostensibly to douse the tension that was generated by the government’s position and decided to hold a special session on a Sunday to scrutinise and digest the government’s position. At the end of the special session, the House came up with two bodies: one, an ad hoc committee made up of nine members to interface between the representatives of the executive arm of government and the organised labour on the removal of fuel subsidy and the second, an eight-member committee saddled with the responsibility of monitoring the subsidy regime.

Though some political pundits viewed the action of the House as playing to the gallery, but the House certainly has its reasons as perhaps true representatives of the people.

The ad hoc committee immediately swung into action and invited all parties involved, but their meeting was deadlocked with no concrete achievement. However, the chairman of the committee, Mr Patrick Ikhariale, claimed that despite the fact that the meeting was deadlocked, the committee was able to bring together both parties in the dispute.

No doubt, after reviewing the events of the nationwide protest that accompanied the fuel subsidy removal and the security implication they protend, President Goodluck Jonathan, after meeting with key stakeholders announced the reduction of the price of fuel to N97 as against the N141 per litre. The step  eventually put paid to the protests.

On the other side, the Hon. Farouk Lawan-led ad hoc committee saddled with the responsibilty of probing the subsidy regime also swung into action. The committee boss reminded all stakeholders that the intention of the House was to unravel the actual amount being spent on fuel subsidy after which the committee would come up with its recommendations that will be submitted to the House.

The Coordinating Minister of Economy and Minister of Finance, Dr. (Mrs) Ngozi Okonjo-Iweala, had briefed the committee as to why the subsidy removal became imperative, declaring that the Federal Government’s decision was to guide against the kind of financial mess that happened to the Greece economy, adding that “we just don’t want to mortgage our future now.”

She, however, accused some unnamed Nigerians of putting up mischievous information to discredit the government of its resolve to remove subsidy on fuel, positing that “we have never said that the country is broke as it’s been insinuated in some quarters; what we are saying is that we are spending far ahead more than what we are making as a country. We are piling up domestic debts; if we do not pay as and when due, it means we will be hurting the economy.”

“Subsidy removal on fuel is not a question of being broke, it is a question of saving for the future. We need about N1.6 trillion a year for infrastructural projects like power generation, good roads, hospitals, schools and so on. Mind you, our population has grown to 167 million, according to projection by Bureau of Statistics. Everyday in this country, people are giving birth and the infrastructural need of the country is being overstretched,” she added.

While making his presentation to the committee, the Chairman of Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) Mr Elias Mbam, maintained that “if the subsidy regime is to remain, it would require concurrent appropriation by states and local government councils,” noting that Petroleum Industry Bill (PIB) should also be passed into law without delay as to facilitate the deregulation of the downstream sector of the oil industry.”

According to him, “there is no doubt that funding subsidy is becoming a heavy burden on government and the economy. This, by implication, reduces the distributable pool to the three tiers of government, thereby affecting their capacity to perform their statutory responsibilities. As of now, the management of subsidy is not clearly defined between the Nigerian National Petrolium Corporation  (NNPC), PPRA, the Ministry of Petroleum Resources and the Ministry of Finance. This has created doubt as to the true quantum of subsidy per litre and the total consumption of petroleum products in the country.”

However, a melee almost ensued between the former RMAFC boss, Engineer Hamman Tukur and the Director General of Budget Office, Dr Bright Okogu, when they engaged each other in brawl over the actual figures of barrels of crude oil Nigeria produces daily. It took the intervention of the chairman of the panel to calm them down.

On January 17, the second day of the committee’s sitting, an alarming revelation came from no other person than the Nigeria Customs Service (NCS). It accused the NNPC of importing crude oil to service Kaduna refinery. The NSC made the claim through its Deputy Comptroller General in charge of tariff, Mr Julius Ndubisi.

The service’s representative went further to say that all the fuel imported into the country by the NNPC was without valid documents as required by the law of the land and also alleged that all the “mothers’ vessels” that bring fuel into the country normally berth at the neighbouring countries, as their manifest bear offshore Cotonou and Offshore Lome, thus making it impossible for the service to know the contents of the products and their countries of origin. He stressed that, “smaller vessels are normally used by the NNPC to bring fuel into the country; we neither board nor rummage the vessels; the products come into the country without the normal form “M” from the Central Bank of Nigeria (CBN) to back up the importation, no invoices, what we have is only bill of landing.”

Mr Ndubisi also used the occasion to open up on the money being owed the service by the NNPC, due to non-payment of duties on imported amounting to N46 billion.

Making his own submission, the chairman of NEITI, Professor Asisi Asobie, declared that the audit report carried out by the agency on NNPC showed that the operations of the corporation lacked transparency and due process, saying that payments for fuel subsidy ought to be made only on the approval of the Accountant-General of the Federation, based on the approval by the  PPPRA as against the current practice where NNPC normally deducts directly from the domestic crude oil proceeds before remitting the rest to the Federation Account.

Also in her submission, the Minister of Petroleum Resources, Mrs Deizani Allison-Madueke, while admitting that there was no cabal in the sector, declared that there were sharp practices and manipulations in the importation of fuel into the country by some operators.

Amazed chairman of the ad hoc committee, Honourable Lawan, upon hearing the revelations, lamented that they were damning and disturbing and had showed clearly that the country was been short-changed due to manipulations and disregard to the law of the land.

On the third day of the committee’s sitting, the NNPC, while giving its presentation, admitted of paying itself fuel subsidy due to it at the source and as well admitted of still transacting business with a major oil marketer which defrauded it to the tune of several millions of naira even after the intervention of the Economic and Financial Crime Commission (EFCC).

The admittance was coming from no other person than its Group Managing Director, Mr Austin Oniwon, who claimed that the corporation had not broken any rule in deducting from source the subsidy money.

There was a drama during the presentation of the executive secretary of PPPRA, Mr Reginald Stanley, over the figures of the daily consumption of petroleum product in the country with those presented by the same agency last  year October before the House committee probing N450 billion allegedly owed the Federation Accounts by the NNPC. Mr Stanley had put the figures of the nation’s daily consumption of petrol at 33.5 million litres per day in 2008, while previous figures given by the agency in October last year were 30.8 million litres per day; 2010, 46.95 million litres as against 43.17 million litres per day and 2011, 58.9 million as against 40.5 million litres during the same period.

Hardly had the PPPRA boss finished his presentation when a member of the committee raised an alarm over the conflicting figures presented by the agency, amounting to 18.38 million litres per day. He insisted that the agency should tell the panel the authentic figures. However, Mr Stanley said that he would only defend the figures he presented before the panel, as he had not been appointed as of October last year and admitted that there were errors in the presentations, promising to correct the errors as time goes on.

The committee, however, frowned at the conflicting figures of the daily consumption of petroleum by Nigerians as presented to the committee by both PPPRA and the Minister of Petroleum Resources, while the minister said it was 35 million litres per day, the PPPRA boss put it at 59 million litres per day with a difference of 24 million litres. The committee lamented that apart from giving room for smuggling and diversion, Nigerians have been paying for 24 million litres per day which they never consumed.

Consequently, the committee directed the PPPRA boss to forward to the committee details of contracts awarded since 2006 till date, the criteria used, the profiles of companies involved and the names of PPPRA officials connected with the processing and payments for such contracts.  

On the fourth day of the committee’s sitting, Dr Okonjo-Iweala, however, punctured the NNPC’s claim that it had right to deduct money at source from the sales of crude oil, declaring  that nobody authorised  the NNPC  to make any deduction from the proceeds of crude oil from the source as currently being done by the corporation.

The minister also countered the claim by the PPPRA boss that the Federal Ministry of Finance was deeply involved in the importation of fuel with the minister responding that the ministry had no role in whatever form on importation of fuel. According to her, it was the sole responsibilities of both the NNPC and PPPRA to import products into the country and insisted that the daily consumption of fuel stood at 35 million litres per day and that the Federal Government paid N1.4 trillion on fuel subsidy alone last year and another N395 billion subsidy on kerosene.

Making his presentation before the panel, former president of the Nigeria Bar Association (NBA), Mr Olisa Agbakoba SAN, advised that the Federal Government should immediately revert to the old N65 per litre pending the time the committee would complete its ongoing investigation. He, however, described the controversial fuel subsidy as fraud, saying that there was no subsidy.

The former NBA president  impressed it on the committee to ensure full implementation of KPMG auditing report which confirmed that the subsidy regime was a fraud and indicted corporate and individuals over the scam and as well maintained that if all leakages in the oil sector were plucked, the nation will save over N3 trillion. Agbakoba said that those indicted by the audit report should be made to face the law, while the National Assembly should expedite action in the passage of the Petroleum Industry Bill (PIB), which would allow more investors into the system and curb corruption. He also asked the House to empower the EFCC to probe the oil sector of the country.

As the panel continues with its investigative hearing and with the mind-boggling revelations on a daily basis from the panel’s sittings, it will be shocking  if nothing concrete is achieved, hence the need for full implementation of whatever recommendations the committee may be coming out with.