As the debate on the controversial fuel subsidy shifts completely from the desirability or otherwise of the policy to the flagrant abuse of the subsidy funds, which is against Section 80 (3) of the constitution that deals with the need to properly appropriate funds before withdrawing it from the treasury, several interesting revelations are being thrown up, most of which are shocking.
While N250 billion was allocated for fuel subsidy in the 2011 budget, by end of August, over N900 billion has been spent. Although, N20 billion was set aside for subsidy on a monthly basis in the Appropriation Act 2011, in August 2011 alone, the total figure expended was N165bn of which the Nigerian National Petroleum Corporation (NNPC) took N88 billion and Independent Marketers pocketed N77.7 billion. In the first three months of the year, both the NNPC and the Independent Marketers did not exceed N62 billion monthly but in the second quarter of the year, available figures shows an expenditure ranged of between N150 billion and N186 billion. With this trend, by the year-end, we will have a fuel subsidy bill of over N1.5 trillion as against the N240 billion budgeted in the 2011Appropriation Act. This wide gap between the budgeted and the expended amount caused the ongoing outrage from all strata of the Nigerian society against the obvious blurred transactions in the subsidy racket.
Then, this is where the real matter lies: Those who know have come up with serious concerns that the figures may have been grossly exaggerated. It’s strongly alleged that some of the vouchers on petroleum products purportedly imported and supposedly consumed between two and three years ago are now being submitted for reimbursement in 2011 and are outrightly reimbursed by the NNPC acting unilaterally outside the law.
If this is true, the question then would be: who exaggerated the fuel subsidy bills- the NNPC; the PPPRA; or the fuel contractors?
Agreed that the issue of subsidizing the prices of petroleum products has remained contentious, the bigger controversy now seems to be on the wide margin between the allowed and the expended. Also being questioned is the propriety of the alleged unilateral extra –budgetary expenditure of hundreds of billions of naira by the NNPC as subsidy on imported fuel products probably on the orders of the Presidency without legislative approval. Where did the NNPC or rather the Federal Government get the huge extra outside of budget to spend on fuel subsidy? Does it mean the NNPC/Presidency maintains escrow accounts outside the federation account? And could this have been possible without the collaboration of the Ministry of Finance? These are questions that need to be answered.
Which funds came into these accounts if they exist- secret and unaccounted crude oil sales or undisclosed earnings from the corporations businesses? These are issues that need to be trashed and seriously too. It is not enough to accept on the face value the corporation’s claim that the money for the extra budgetary spending came from earnings derived from “sale of certain crude oil.” If NNPC has been secretly selling crude oil outside the volume assigned to it, then the matter is more serious than the current fuel subsidy politics. The apex oil concern has stated that it was the Ministry of Finance that handled all the payments and as such should furnish details of the payments as scheduled. The Petroleum Products Pricing Regulatory Agency (PPPRA) another agency under the Ministry of Petroleum Resources on its part has alleged that the NNPC unilaterally came up with this funny fuel import bills deducted the money and paid out.
There are many grey areas in the different defensive arguments of the affected organizations. Was it not the NNPC that advised the Finance Ministry on what and who to pay the subsidy bills? So how come every agency involved in this scandal is trying to exonerate itself and shift the blame to others? The reason is simple: Lack of coordination among the agencies handling the nation’s oil business and the accruing revenue thereof. It seems some arms (agencies) want to let the Nigerian people know where this problem of corruption and fraud in fuel import racket actually lies. As if the NNPC’s misdemeanours were not enough embarrassment to the government, the PPPRA has also publicly admitted that the ongoing effort by the Federal Government to remove subsidy on petroleum products is an unpopular policy. The PPPRA Executive Secretary, Engr. Goody Egbuji made the admission when the Senate Committee on Federal Character and Inter-Governmental Affairs visited the agency’s offices on an oversight tour in Abuja on Wednesday October 19.
His words: “The cost of fuel has become a national challenge. We are on the verge of implementing programmes that will not be popular. We want to be selling petroleum products at commercial prices. Why I call it a challenge is that the essence of all the enlightenment is to get the people aware of the kind of challenges they might be facing with deregulation and to let them know what the nation will gain from the programme.” The PPPRA boss tried to exonerate his agency by saying that, “A lot of people try to interpret it by saying the reason the subsidy budget is rising so high is because there are sharp practices going on. We are not part of the sharp practices. Though at the same time, he said “we have incidences of irregularities but we are trying to curtail that. They are the normal things you see in a society that has problems. We have product theft, a situation where some people go in the night to steal fuel and pocket the money but honestly, they have no significant impact on the problem facing distribution.”
So between the NNPC and the PPPRA, who is going to sit in judgment to tell Nigerians the truth? And where is Diezani Madueke in all these as all the agencies involved are under her ministry (Petroleum)? Where is President Goodluck Jonathan who reigns as the sole administrator of the oil sector? Maybe Ngozi Okonjo-Iweala would come in to help. Naija!
Interestingly, the PPPRA’s position sounded as if they were not consulted or rather did not agree with the move. However, the position is understandable as the agency is the endangered specie in all these fuel subsidy withdrawal gambits.
Senate President, David Mark was blunt when he asserted that “the list of the few powerful Nigerians benefiting from this subsidy racket will shock Nigerians, if published.” According to him, “this is the cabal that is holding the entire nation hostage and they need to be exposed. How can just a handful of people be milking the nation dry?” Another interesting aspect of this controversy is that the NNPC, PPPRA, the Ministry of Finance and everything that has to do with this fuel import subsidy issue has been under the direct supervision of the Presidency, a policy initiated by Chief Olusegun Obasanjo when he acted as the sole administrator of the nation’s oil sector. Does it mean that the house is divided against itself?
For sure we have to continue fuel imports at least for sometime to come whether subsidy is going or staying and if this be, the federal government (Presidency) where these agencies are being controlled should as matter of urgency publish the manifest of those who buy petroleum products for the nation with the real names of the owners of such businesses and the countries where the products come from. Just as the federal government through the Central Bank did when it wanted to restructure and allegedly save the banking sectors, it should as a necessity now also publish the names of all those who are buying fuels from abroad for us. The Nigerian Labour and Trade Union Congresses should compel the government to do this as the activities of these faceless individuals/organisations are infringing on our existence as a people. We have to know those who are doing this business so that we will know if actually anything is being imported and then the quantity of imports and where the products end up.
If the NLC and TUC can achieve this, they would have tackled the hydra-headed problem of the big masquerade called the “cartel” that has intimidated everybody including the president in the nation’s oil sector (downstream). And if the government refuses to publish the names, labour should engage private investigators to covertly or overtly obtain the list. This can be done and easily too where there’s a will to work for Nigeria especially in this dispensation of Freedom of Information Act of 2010.
While the subsidy scandal is being investigated, the organize labour should also give the federal government deadline to revamp our existing three and half refineries and if government fails, labour with the full assurance of support from the Nigerian masses should simply go ahead and shut down government without further dialogue with anybody.
The organized labour should not be deceived by Jonathan’s promise to build three new refineries under public –private partnership as part of the measures to palliate the anticipated hash effects of the withdrawal policy. That was nothing but a mere political jive –smooth talk that is deceptive and insincere. It will take at least 48 months to build a refining plant that can process anything from 100, 000 barrels per day. So between now and then what happens? And even as we talk now, no form of work has commenced at any of the proposed sites for the new refineries. Does it not make a better sense to consider and massively focus on expanding the capacity of the Port Harcourt, Warri and Kaduna refineries to process increased volume of crude feedstock as a short term measure to address the present embarrassing policy of importing everything from countries we are far better than in terms of almost everything?
The Ogbia, Bayelsa state project was stalled at preliminary survey stage; at Lekki, Lagos there is no sign of activities at all and the one slated for Itobe, Kogi state was completely bugged down by communal crisis between Igalas and the Ibiras.
Why are we not considering expanding just few process units at the existing refineries to increase their capacities? Experts have said that if additional catalytic columns and reforming units can be attached to the existing structures at the refineries, we will be able to increase the capacity of the refineries to carry out simple distillation and reforming of the distillate to at least give us petrol (PMS), kerosene (DPK) and diesel (AGO) and these are basically the products whose importation has sulked this nation to its marrows.
This initiative can be completed within six months to one year at least this would introduce some palliatives while we wait for Jonathan’s three new refineries which obviously will not come onstream before the end of the president’s tenure in office except he is running for a second term.
IFEANYI IZEZE IS AN ABUJA-BASED CONSULTANT ON STRATEGY AND COMMUNICATION (iizeze at yahoo dot com; 080334009)
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