August 14, 2012

Subsidy scam: ‘Banks too are culpable’

Clara Nwchukwu

Marketers and oil traders have expressed concern that banks have been shielded from the fuel subsidy scam investigations.

Some of them who spoke with Vanguard argued the banks re as culpable as the operators since they were the ones that issued the Letters of Credit, LCs, that were used for the fuel import transactions.

In their opinion, as major players in the petroleum industry, the banks should bear the heat more, as without them there would have been no transactions.

Explaining the role of banks, one of the marketers said, “Everything about oil and gas transaction revolves around the banks. They fund these transactions and so they have a good knowledge of the set up. They release the funds; receive the funds, even deducting all the principals and interests due before crediting marketers’ accounts with whatever is left in the balance.”

Agreeing that banks should equally be investigated, another marketer noted that there is no bank in Nigeria that in not involved in funding fuel imports, because of the quick turn round on funds and profit involved.

He maintained, “The banks have all the documents and information that can throw more light on some grey areas because the banks keep a firm grip on the transactions and they do not want to lose their money.”

He, added, “It is the banks that warehouse these funds. You cannot investigate the marketing companies and get the true picture without also investigating the banks. Most times, the marketing companies record losses in transactions because when banks are done with their deductions; there will be hardly anything left for the marketers.”

Report criticisms

Despite being reputed as being more credible than the House of Representatives’, the reports of the Presidential Committee on Fuel Subsidy Payment headed by the Managing Director and Chief Executive Officer of Access Bank Plc, Mr. Aigboje Aig-Imoukhede, has continued to receive more criticisms from petroleum operators.

The marketers maintained that the report is lopsided and biased, adding that the it is not a true reflection of their presentations to the committee.

They also argued that the committee was a ploy by the federal government to tarnish the image and reputation of those of them engaged in genuine businesses, and who have invested time and resources into filling the vacuum created by government’s ineptitude to meet national fuel consumption.

Rather than make them out to be a bunch of corrupt operators, who are out to take advantage of the system, government should, instead, express better appreciation for their efforts in not only providing fuel for the people, but also investing in infrastructures that have kept the economy running and providing employment to thousands Nigerians.

They also questioned the sense of equity in the composition of the committee. According to one of the marketers who was indicted in the report, “We made presentations before the panel with the full complement of all the documentation of the transactions being questioned. Why should I be held responsible for a mother vessel that was not on the Llyods’ list?”

The marketers, however, agreed that there was the need to sanitise the sector in order to bring credibility to bear on all the operations and practices of the oil and gas sector. They insisted that they are not averse to probes and investigations neither are they in support of unwholesome practices in the sector, but noted that objectivity and transparency is key in the investigations.

Another marketer whose company was named for further investigation in the report insisted that his company was not culpable for any offence. According to him, “The transaction for which my company was indicted was properly done. There are records of the arrival of the product, the storage and trucking.

All the relevant government regulatory agencies witnessed and certified the transaction. The money from that transaction was also paid to the appropriate quarters. All the records are there. There is nothing whatsoever that is shady about the transaction.”

Some of the marketers also criticized the transparency of the report, and insisted that companies that are known for circumventing the process were not included in the report.