By Omoh Gabriel
This article was first pubsished on December 12, 2011.
Nigeria is a funny place to do business. It is a country where blame game thrives. It neither respects the sanctity of contract nor respect individual property rights. Most time when those in authority are called to account for their stewardship they look for scapegoats in the private sector. Subsidy removal has been in the front burner for sometimes now.
The executive arm of government was asked by the National Assembly to explain how the amount N450 billion voted for subsidy this year jumped to N1.3 billion in the first nine months of the year. Neither the minister of Petroleum resources nor her Finance counterpart has been able to explain the details to the honourable members.
But funny enough the committee has come out with the list and names of those who “shared the subsidy”. Nigerians are like these men have committed a crime. If the purpose was to cause public anger against these companies and individuals, the senate committee has done just what the CBN did when it published the list and names of those indebted to banks.
Ever since that CBN publication that criminalizes credit the banks are yet to recover from the aftermath of that publication. Right now this government is not in the position to import all the fuel need of the economy. It can not refine the product locally, so it needs the cooperation of the private sector operator.
The Senate Joint Committee investigating the management of fuel subsidy, last Friday, during public hearing, revealed that more than 100 companies, including construction companies participated in the sharing of N1.426 trillion between January and August 2011. This contradicted the figure of the Petroleum Product Pricing Regulatory Agency (PPPRA) which put it at N1.348 trillion.
This senate committee did not find out for what reason was a construction company paid subsidy, who asked the company to be paid? Is the subsidy claim a payment for job done? The figure said to be paid for subsidy between 2006 to date, has been put at N3.655 trillion which the committee was uncomfortable with because of the astronomical jump in 2011.
The committee was surprised that some beneficiaries were even construction companies that had nothing to do with oil. The implication of this is that the committee has not done enough work before coming out with the list. It should have asked the executive arm of government to explain what a construction company was doing in the list. The alarm raised is not for the Nigeria publication. It is just meant to weep up sentiments.
According to the committee, the oil companies that benefited from the sharing of the subsidy include : Oando Nigerian Plc., N228.506 billion; MRS, N224.818 billion; Enak Oil & Gas, N19.684 billion, Bovas & Co. Nig. Ltd, N5.685 billion; Obat; N85 billion and AP, N104.5billion. Others, according to the Chairman of the Committee, Senator Magnus Abbe, were Folawiyo Oil, N113.3billion; IPMAN Investment Limited, N10.9billion; ACON, N24.1billion; Atio Oil, N64.4billion; AMP, N11.4billion; Honeywell, N12.2billion; Emac Oil, N19.2billion; D.Jones Oil, N14.8billion; Capital Oil, N22.4billion and AZ Oil, N18.613billion. The list also comprises Eternal Oil, N5.57 billion; Dozil Oil, N3.375 billion; Fort Oil, N8.582 billion while some construction companies were also on the list.
These companies are known to Nigerians as down stream marketing companies that import fuel and sell to Nigerians that make claim on government for selling products at government controlled price.
As expected the PPRA has disowned the alleged N450 billion kerosene subsidies owed the Nigerian National Petroleum Corporation (NNPC) by the Federal Government, saying the claims were not recorded in their books. The Executive Secretary of PPPRA, Reginald Elijah, told the committee that between 2006 and September 2011, a whopping N3.655 trillion was expended on fuel subsidies. The question is has this committee seen the audited report of these two government agencies?
For purposes of transparency and accountability, what this committee should have started with is the publication of the accounts of NNPC and PPPRA for the last five years. A fact finding committee looks for the accounts of company either by going through an audited account by external auditors or institute one cause one to be done so that it can get raw facts.
More so that the figure did not tally with the figures of N1.426 trillion submitted by NNPC as subsidies on the products as at August 2011, but argued that the actual and correct figure was N1.348 trillion.
The federal government has not come out to say that it did not approve the payment. The named companies did not put the policy that allow subsidy to be paid in place, they did not pay themselves this amount. The government has agencies in place to monitor fuel import and verify claims made on government. What the senate committee has done is to criminalize those who did business with government and got paid.
If the senate had come up with the argument that these companies and individual got paid for products they did not supply, that would have been criminal enough to call for their prosecution. But that is not the case. The federal government over the years has promoted uniform pricing for petroleum products in a country as vast as Nigeria. It is the government that set up the Bridging and petroleum equalization funds to ensure uniform prices for petroleum products in the country.
It is the same government that licence fuel importers and asked them to sell at the same price across the country and collect the price differentials from it. What then is the offence of the beneficiary except that Mr. President called them a cabal.
Nigerians must not be deceived by government antics at diverting attention from the real thing. Who approved these payments? Who verified that products were supplied? Who apart from these companies benefited from the disbursement? Why is the amount disbursed far above that which was budgeted for? Why is the NNPC not able to account for the amount disbursed?