BY EMMAN OVUAKPORIE
Revelations point to high level corruption,…as CBN, Customs trade blames over waivers
The managing director of the company suddenly became mute. No words uttered! This, after it was disclosed at the on-going House of Representatives probe on the management of subsidy funds, that his company got N2.3billion. His spokesman, Aminu Mohammed, had told the panel that the barely 28 year old man had been sick for over one year.
Asked how much his company got, Aminu said though he was not in the employment of the company when the largesse came, but it was only N2.3billion. Some of the companies that even got the allocation to supply fuel were not registered while some operated without guidelines.
So far, 140 companies have been invited by the panel to give testimony on their level of involvement in the Fuel Subsidy Fund, FSF. Also, three different lists were submitted by PPPRA: The first had 110 companies, the second had 128 and the latest list had 140 companies.
From tomorrow, the panel will start a closed door session as all public hearings on the fuel subsidy wahala ended on Thursday. Last Tuesday at the hearing, the Central Bank of Nigeria and Customs traded words over the circular that mandated importers to bring fuel into the country without paying dues or undergo inspection at the ports.
Deputy Governor of the CBN, Operations, Mr Tunde Lemo, told the panelists that the apex bank as an institution did not issue the circular that mandated oil importers not to pay duties but a secretariat of inter_agency did and that the customs was adequately represented”, on that panel.
Countering the Deputy Governor, Deputy Comptroller General of Customs, Mr Julius Nwogu, said though he was part of the secretariat that issued the circular, he insisted that “we had objected to it that importation of petroleum products was not in the exemption list but it fell on deaf ears.”
But Lemo was to insist that “we at CBN do not have the authority to stop the Customs from inspection of products.”
Nwogwu however pointed out that “the circulars came from the Federal Ministry of Finance and the CBN directed us not to examine petroleum products when all imports are guided by the destination regime and this was unfortunately not backed by any legislation from NASS.
Using Briefcase Companies As Fuel Importers
The panel got closer to identifying the factors aiding corruption in that industry on Wednesday as more revelations came to the fore. A number of the oil outfits which testified before the ad_hoc committee admitted that they had no retail outlets with which to directly distribute the products to the consumers or storage facilities.
Committee chairman, Faruk Lawan, noted that Nigerian Consumers were not fairly treated by the series of firms playing roles as middlemen. “Worse still, there are some people who had neither storage facility nor retail outlets. They simply collect products and re_sell to other marketers” Faruk added.
Depot And Petroleum Products Marketers Association, DAPPMA, which had been fingered by many stakeholders as causing much of the problems in the distribution of products, told the committee that it had no hand in the shady deals in the industry.
DAPPMA chairman, Sylverius Okoli, told the panel: “It is sad that all marketers including DAPPMA members have been labeled as criminals” Okoli said there are other layers of middlemen who buy from DAPPMA to sell to consumers.
The committee expressed shock that after buying kerosene at N40.90 per litre, DAPPMA would sell at N75 per litre as admitted to by Okoli.
Another issue that came up at the hearing was that of refusal of many mother vessels bringing refined products to the country to enter Nigerian territorial waters but stayed and sold out products in the high seas some 52 nautical miles far into the sea.
The committee frowned at the practice saying that the revenues due to Nigeria from these transactions were not paid to her because the transactions were taking place offshore and sometimes as close as Cotonou or offshore Lome. A firm, Vitol, which specialised in supplying products to the high sea for Nigerian importers to buy, admitted that the high sea business attracted no duty or charges from any country since it happened in international waters.
Managing Director of the company, Mr Rodney Garshon, was directed by the committee to produce the list of all the firms it had transacted the offshore business with particularly those importations into Nigeria.
Pef Fails To Tell Panel Actual Quantity Of Fuel Released
The panel also got irked by the inability of Petroleum Equalisation Fund, PEF, to furnish it with all details of oil transactions it carried out since 2006. The lawmakers’ anger was as a result of the fact that the agency had been receiving N5.85 per litre since March 2011 from the Petroleum Product Pricing and Regularity Agency, PPPRA, template up from N3.00 since 2006 when the bridging commenced.
The agency is vested with the responsibility of reimbursing oil marketers with transportation element to deliver products from the point of receipt to the retail outlet in order to facilitate the sale of its products at government approved prices.
Though the agency could not ascertain the actual consumption of petroleum products on daily basis, it however reimburses marketers through bridging, inter_district and equalization schemes. Lawan noted that the received figures from the PPPRA needed to be known in order to aid the committee in its investigation, adding that the figures, when computed could also assist in arriving at the daily fuel consumption.
Even as it was revealed that there was a lack of mechanism to properly monitor delivery of petroleum products for bridging claims by oil marketers, the agency was also found to take about 48 days to settle claims on submission of documents by the marketers.
Though the agency disclosed that it was set to launch an electronic verification system through its Akira project that would ease process of claims, it could not however confirm the actual delivery of petroleum to the end users. Speaking before the committee the executive Secretary of PEF, Adefunke Kasali, said the organisation is faced with the challenges of having to rely on manual mechanism to identify and verify bridging claims by marketers.
She said the reliance of the agency on manual verification mechanism was among other factors responsible for the delay in settlement of bridging claims, adding that improper documentation by the marketers also contributed to the delays.
Kasali stressed that there was minimum margin of error in the agency’s confirmation of products’ movement from a receiving to delivery depot across the country.
According to her, in addition to the agency’s staff, officials from the PPPRA, Department of Petroleum Resources, DPR, and a host of others were always on hand to verify in_coming and out_going products.
She said: “If the marketer however delivers the product to its outlets from the receiving depot but not above 100km, the marketer has to contribute ‘something’ back to the PEF which was used to equalise the prices through the equalisation scheme.
“If he distributes the products to his outlets more than 100km from the receiving depot, he comes back to the PEF to claim a certain amount of money because the National Transportation Average divides the country into nine zones of 50km bounds.
“Distribution within zone 1 and 2 would pay money back into PEF while distribution within zones 3 and 9 would enjoy allowances from the PEF”. The committee however stressed the need to provide the requested documents to aid the on_going investigation.
CONFLICTING KEROSENE PRICES
No agency was able to give the panel the actual retail price of kerosene. Last Thursday, the Nigeria National Petroleum Corporation, NNPC, Group Managing Director, GMD, Mr Austen Oniwon, and the Executive Secretary of Petroleum, Pricing, Products, Regulatory, Agency, PPPRA and others failed to provide reason on why kerosene is sold at N130 against the subsidised price of N50.
The GMD had said the subsidized price was N40.90k and the retail price in NNPC filling stations was N50. The Managing Director of Pipeline Products Marketing Company, PPMC, Mr Haruna Momoh, said the retail price of kerosene was between N75 in Lagos and N80 in other places or N90.
The Executive Secretary of PPPRA, Mr. Stanley Reginald however had a contrary figure when he told the Committee that the retail price of kerosene was N130 per litre in most filling stations across the country.
Reginald had argued that the non_subsidised price of kerosene is N151 and the subsidised retail price was N50 from the original price of the subsidized price of N40.90k. The Managing Director of Directorate of Petroleum Resources DPR, Mr. Osten Olorunsola, also said the retail price is between N75 and N130 “but the average price is within the region of N130.”
When the Accountant General of the Federation, Mr. John Otunla, also had his turn! According to him, “if the need arises that there are discrepancies all we need do is find the sources of differences because accounting could be very dynamic” – this was in response to the discrepancies in the figures that were churned out.
The Accounting firm of NNPC, Olusola Adekanla and Co, represented by Kehinde Oyeleke, could not give the volume of petroleum products imported from Cotonou offshore by the NNPC.
VIOLATION IN FUEL SUBSIDY PAYMENT
The committee had asked the NNPC GMD why he flagrantly went ahead to supply kerosene without a written instruction from the presidency when there was actually a suspension on kerosene subsidy. The GMD explained that the Late Umaru Yar’Adua had set up an implementation committee to look into the kerosene issue but unfortunately the late President was incapacitated and it was discovered that the price of deregulated kerosene would be N150 higher than fuel which had that time was reduced from N70 to N65.
It was then agreed that it would be improper for kerosene to be higher than PMS and we had to supply fuel at a subsidised rate and “I had pledged to this honourable House when I was summoned last year that I will not sell kerosene beyond N50.
The Chairman of the committee, Farouk Lawan, probed further that “you went ahead to make payment for the kerosene without authorization”.
But Oniwon insisted that he never violated any law or instruction because as at that time the President was incapacitated, meaning Yar’Adua’s ill_health becAme a magna charta for unilateral decision making.