Ahead of deliberation on the petroleum subsidy probe report by the House of Representatives next Tuesday, EDEGBE ODEMWINGIE examines the intrigues that have trailed the release of the widely indicting report, amid reports of pressure on the committee to soften its position.
The release of the Farouk Lawan-led House of Representatives probe into the management of petroleum subsidy regime report ended weeks of speculation on the fate of the widely indicting report.
After the report’s presentation was repeatedly rescheduled, the more than 200-page document was presented on Wednesday amid concerns that the Lawan-led committee which carried out the investigations, had come under se vere pressure to soften its position. Analysts have severally expressed fears of high level moves to doctor the report.
“The committee believes that if the Petroleum Subsidy Fund was properly managed, N1.07 trillion would have been available to the three tiers of government.”
The foregoing captures the extent of rape that the federal government’s petroleum subsidy programme was subjected to in the hands of Nigeria’s state run oil regulators and dubious oil marketers. At least, this forms part of a deluge of cases of subsidy funds theft contained in the report.
On January 1 this year, the federal government had announced the removal of subsidy on petrol, triggering nationwide protest in dissent. The House, in an emergency session on January 8 set up an ad hoc committee to verify and determine the actual subsidy requirements and monitor the implementation of the subsidy regime in the country.
Subsequently the adhoc committee held public hearings from January 16 to February 9 taking sworn testimonies from 130 witnesses and receiving over 3,000 volumes of documents.
A looting bazaar
The indictments were wide and the scale of fraud scandalous. The Nigerian National Petroleum Corporation’s (NNPC) management and board, senior officials of the Petroleum Product Pricing and Regulatory Agency (PPPRA) and fraudulent oil marketers are to refund N1.067trn to the coffers of the Federal Government for illegally drawing subsidy funds running into billions of naira without importation.
The committee also recommended the prosecution of errant officials found wanting for violations that cost the nation trillions of naira.
House Speaker, Aminu Tambuwal, while receiving the report, fixed Tuesday, April 24 for deliberations on the 61 recommendations made by the committee.
According to the breakdown of the report, the NNPC will be made to refund to the federal purse N705 billion; PPPRA N312 billion; oil marketers N8.7 billion. Firms that refused to appear during the investigations are also to repay N41.9 billion. This brings total refunds to N1,067,040,456,171.31 trillion.
Fifteen companies obtained foreign exchange but failed to import petroleum products. Another 18 firms, including international oil giants, Mobil Oil refused to be investigated.
The report recommended the unbundling of the NNPC to make its operations more efficient and transparent. According to the report, this can be achieved through the passage of a well drafted and comprehensive Petroleum Industry Bill (PIB). It directed the auditing of the NNPC to determine solvency.
For 2012, the subsidy committee’s report recommended to the federal government that petrol subsidy should be fixed at N557 billion as well as a provision of kerosene subsidy of N249 billion. According to the report, the true consumption level of petrol in 2011 was 31.5 million litres per day, recommending 33 million litres per day for 2012.
Recommending the blacklisting of the NNPC and the PPPRA for three years, the document proposed the prosecution of those involved by the Nigeria’s anti-graft agencies (EFCC and ICPC). Executive secretaries of the PPRA between 2009 and 2010 are to be prosecuted for supervising the fraud, the report adds while the ministry of petroleum should be restructured.
The damning indictments affected past and serving senior management officials of the NNPC and the PPPRA. For the NNPC specifically, the report recommended the sack of the current Austen Oniwon-led board and management.
Going forward, the report recommended among others, that marketers without storage facilities and retail outlets should be excluded from participating in the subsidy scheme. “This will end the bazaar that constituted a serious drain on the nation’s economy and created room for abuses” the report reads.
Also, the services of the accounting firms of Akintola Williams, Delliotte and Olusola Adekanola and Partners contracted by the petroleum ministry were recommended to be discontinued with immediate effect for professional incompetence.
A snubbed KPMG audit
Checks showed that the charges contained in the Lawan report had been largely identified in a 2010 KPMG audit report which was commissioned by the country’s Ministry Of Finance – the current administration has continually snubbed that audit report.
The KPMG audit report uncovered widespread rot and corruption in Nigeria’s oil sector, and particularly, the now tainted subsidy management. The 43-page document, uncovered from government closet and made public by Premium Times, catalogues a horrendous scope of rot and brazen fraud in the sector, indicting several government agencies, including the NNPC.
Amongst other revelations, the report indicted the corporation for overpaying itself and marketers’ subsidy claims, falsifying naira to dollar exchange rate, and pursuing oil import operations without documentations.
Will it be like the power probe?
The Lawan-led subsidy probe will not be the first to raise much dust. In scale, the subsidy probe is child’s play when compared with the famous 2008 $16billion Power Probe conducted by the same House.
Following scandalous revelations that contractors took funds in the name of executing power projects but delivered nothing, the then Chairman of the Committee on Power and Steel, Mr. Ndudi Godwin Elumelu, threatened “a lot of people will go to jail with what we have seen and heard in this investigation.”
Well, that did not happen. Four years after the Elumelu probe, there have been no refund of stolen contract funds; no prosecution and no sentencing of indicted person. In fact, it took a controversial ‘minority report’ for the erstwhile Dimeji Bankole led House to jettison the widely indicting Elumelu Panel Report. Analysts in the know pointed to “political and parochial considerations” in throwing out that report.
Coincidentally, Tambuwal was chairman of the ad-hoc committee that reviewed the report of the controversial power probe committee. The man who wrote the minority report, kicking against the work of the Elumelu panel, Mr. Ajibola Muraina, is the current Chairman of the House Committee on Petroleum Resources (Upstream).
There are widespread fears that the House subsidy panel’s report may suffer the same ill fate as the power probe.
Dissent in quarters
Typically, the subsidy probe report has been pooh poohed in some quarters. Going by a monitored report, a relatively unknown group, Legislative Integrity Assembly said on Wednesday that the report of the House Committee into the probe of fuel subsidy was “apparently doctored” following conflicting details about the report in the media in recent weeks.
The group in a swift response to the report release said that it noticed a number of inconsistencies having followed coordinated leaks of the committee’s report in recent weeks. The group, which claimed to have seen the original recommendations of the committee, lamented that what was submitted to the House on Wednesday was an “edited, doctored report.”
“The list of indicted companies suddenly got shortened within 24 hours. This country is in trouble if this is allowed to go unchallenged. It just confirmed that probes in this country are not to be taken seriously,” the group alleged.
For a lower House in desperate search to restore public confidence after a tainted past, indeed, its actions and inactions in the highly anticipated Tuesday deliberation of the subsidy report is in focus.
Of course, put side by side the ambitious legislative agenda adopted by Representatives at the inauguration of the seventh assembly, the effect of its handling of the report will go a long way in forming lasting public opinion on the direction of the lower House. Nigerians watch!