By Uduma Kalu
It’s been accusations and counter accusations as more details of how the Nigerian National Petroleum Corporation NNPC is run emerge. The details are coming due to the protests that greeted the fuel subsidy removal by President Goodluck Jonathan.

This week, the house of House of Representative Committee charged with investigating the management of funds related to fuel subsidy began public inquiry into the process of subsidy payments by the Federal Government to select licenced marketers of petrol and kerosene.

One of the ugly details the ad hoc committee discovered was that Nigeria over-imported petrol on a daily basis to the tune of 24 million litres in 2011. The house said Nigeria does not have sufficient storage capacity to accommodate the surplus.

The bombshell began on Tuesday when  the Petroleum Minister Mrs Diezani Alison-Madueke provided the statistics indicating Nigeria’s daily consumption of fuel is 35 million liters. But on Wednesday, Executive Secretary of the Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley, disclosed that the volume of fuel actually imported was 59 million liters per day.

The house noted that the difference between fuel consumed and fuel imported is 24 million liters. And that since Nigeria pays subsidy on this 24 million liters that is not even utilized by Nigerians., Nigeria paid approximately N670 billion on petrol it did not consume last year.

In reaction to the revelation, Chairman of the House Committee, Farouk Lawan said, “How could the nation be made to pay for 59 million liters daily when we consume only 35 million liters daily? The balance of 24 million liters per day might be the area of sharp practices. By making that provision, you are encouraging smuggling because we know that this 24 million liters balance would simply be smuggled out of the country since it has been paid for already and we cannot consume it.”

He further added, “This is a case of serious economic sabotage because when the daily supply excess of 24 million liters is multiplied by 365 days, you get 8.76 billion liters. This is the volume of fuel that might have been smuggled out of the country in 2011.”
Lawan bemoaned a situation whereby the consumption level of the country is known but certain people still import extra and pay subsidy on it. This is criminal, the lawmaker said.

He added: “Taking 2011, for instance, per day discharge was 59million litres and, consumption, from what was presented to us here, was an average of 35million litres per day.

What that means is that there is a gap of 24 million litres per day being funded by Nigerians as subsidy that was not utilised by them.

“This, of course, amounts to overpayment; or, in order words, sharp practices, while we are paying for 59million litres per day instead of 35million litres per day. Someone, somehow, is being short-changed. That is, Nigerians, by 24million litres per day.

“The second implication of this is that smuggling is being encouraged by the system because if local consumption is 35million litres per day and we are paying for 59million litres per day, it means we are making available 24million litres per day for importers to smuggle out, because it cannot be consumed and this is on a daily basis for 365 days in a year.

NNPC Group Managing Director Austin Oniwon said at no time did he illegally take money out of the Federation Account for subsidy payment. I don’t go outside that. So, it is not for me to determine what is deducted from the crude’s value. Before I deduct, I write to the Minister of Finance that the PPPRA has approved it for me. “That is the procedure I have been using and I believe that it is the same my predecessors used.”

On Wednesday, the Finance Minister, Dr Ngozi Okonjo-Iweala was quizzed by the [adhoc] committee on  on her ministry’s involvement in the oil subsidy process. In her exchanges with the committee, the minister said all monies made from crude oil through NNPC and partners – are not paid directly into the federal accounts of the nation.

She stated that the monies for the oil subsidy are withdrawn before it gets to the national accounts – of which she accented by noting that it was unconstitutional for the NNPC to deduct any monies from Nigeria’s crude oil revenues before payment into the national accounts.

She however said  the finance minister authorised the N1.3trillion payment for oil subsidy. She admitted under questioning from Farouk that the N1.3trillion was not only paid for petrol subsidy – that the sum contained arrears for Kerosene and Petrol subsidy dating back to 2008.

She admitted also that only N250billion out of the N1.3trillion was paid for petrol subsidy.  She admitted that she does not know the total volume of petrol consumed in Nigeria. This is as she complained that Nigerian Federal Government was virtually subsidizing the entire ECOWAS community – as illegal transporters of petrol move subsidized petrol out from Nigeria to neighboring ECOWAS countries.

On his part, the Deputy Comptroller of Customs, Mr Ndubuisi Nwaogu,  alleged that all importations made in connection to subsidised fuel by the NNPC never went through the  Customs Services.  Nwaogu said all documentations fuel importation was shielded from the customs by the NNPC.