ANOTHER wave of campaign for the removal of the Petroleum Affairs Minister, Diezeani Allison-Madueke, has peaked as conflicting figures on the actual amount that actually goes into subsidizing refined oil
products caught the attention of the Lawan Turaki-led House Committee looking into the downstream sector of the Nigerian oil industry.
Various civil society groups in Nigeria and the media are concerned that Mrs Allison-Madueke, and the leadership of the NNPC and PPPRA have swept aside the probe, and the invitation to the Economic and Financial Crimes Commission (EFCC) may yet end as deceptive window-dressing.
The civil-society groups are speaking-up just as documents have begun to fly around on the lavish lifestyle of some members of the Allison-Madueke household. According to an online news outlet, Allison-Madueke’s son lives a recklessly opulent lifestyle off of Nigeria’s oil subsidies and tax-payers’ sweat. However, the cozy relationship which the embattled Minister enjoys with the first-family may make her immovable as the Rock of Gibraltar.
The Petroleum Products Pricing Regulatory Agency, PPPRA, on Wednesday gave a detailed account of how the country has in the last eight years been shortchanged in the payment of petroleum subsidy. It disclosed that the country had been paying subsidy on about 24 million liters of fuel per day which Nigerians did not consume. This amounts to N1.1bn daily at the current subsidy rate of N49.08 per liters. Consequently, between January and October 2011, Nigeria may have paid subsidy on about 7.2bn liters of petrol, which members of the House of Representatives feel may have been smuggled out of the country.
According to the PPPRA, the nation imports about 58.9 million liters of Premium Motor Spirit per day, even though Nigerians only consume about 35 million liters each day. The country’s consumption level does not, however, stop the Federal Government from paying subsidy on the excess 24 million liters, a development which the House of Representatives Ad hoc Committee on Subsidy Regime described as a veritable way of encouraging smuggling. PPPRA Executive Secretary, Mr. Reginald Stanley, who stated this yesterday at the ongoing public hearing by the committee, however, tried to exonerate himself from the matter.
Stanley explained that he only assumed duties barely five weeks ago and that subsidy was actually paid on product discharge rather than product consumption. The PPPRA boss argued that globally, the Gross Domestic Product, GDP, was a major yardstick for measuring the fuel demand level of nations. “Today, we talk about consumption. The 35 million liters refer to actual consumption. This is different from discharges or imports. There is a difference between the two,” he said. According to Stanley, Nigeria has a storage facility that can take only about 1.494 billion liters of oil which could not have contained the excess 7.2 billion liters produced between January and October 2011. However, Committee Chairman, Hon. Faruk Lawan chided the agency for providing a leeway for fraudulent businessmen to smuggle the product out of the country to the detriment of Nigerians who were also made to pay subsidy on such product.
According to him, the situation was even more worrisome considering the fact that it is a daily occurrence and not something which occurs once in a year. He said: “If actually the level of consumption is 35 million liters per day and we are paying for 59 million liters per day, it means that somehow, someone is short-changing Nigerians to the tune of 24 million liters per day. “The second implication is that it encourages smuggling because the balance of 24 million liters per day is smuggled out because it cannot be consumed.” The PPPRA boss, who noted that when the subsidy started, Nigeria’s consumption was 25.6 million liters per day, however, revealed that the projection for 2012 was about 39.2 million liters per day. Although, he lamented that it had become difficult to budget for subsidy due to the volatility of the international market, the committee noted that since the entire nation’s budget was predicated on the oil price, it should not be a difficult thing preparing a budget for subsidy.
He said: “When it comes to budgeting for subsidy, it is a very serious exercise because it is driven by the volatility in the international market. The fund for subsidy is a virtual fund because there is no account where the money is kept.” The committee chairman, however, stated that since the Nigerian system allowed for a supplementary budget, it would be untenable to describe as difficult, budget preparation for petroleum subsidy. The Group Managing Director, Nigerian National Petroleum Corporation, NNPC, Mr. Austen Oniwon, said the cost of fuel in the country could have been relatively cheaper. He said this was not presently the case because of avoidable cost incurred by the corporation and others involved in fuel importation.
In another development, the Conference of Nigeria Political Parties (CNPP) has demanded the resignation of the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, as a precondition for a successful probe and prosecution of those found to have embezzled funds meant for subsidizing imported petroleum products. Apart from the minister, the group also appealed to the National Assembly, to prevail on President Goodluck Jonathan to ensure that other top officials of the Petroleum Resources Ministry and agencies under it, temporarily vacate their respective offices to ensure a transparent investigation.
The CNPP, in a statement issued on Wednesday and signed by its Secretary General, Chief Willy Ezugwu, said it only makes sense that Nigeria adopts international best practices in dealing with corruption since the government has proven that it is in a hurry to embrace current trends in running the affairs of the country. The CNPP warned that the probe in the oil sector would be another charade if the likes of Allison-Madueke; the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Austin Oniwon; Executive Secretary of PPPRA, Reginald Stanley and other key players in the industry are allowed to remain in office since they will likely influence the direction and outcome of the investigation.
It said: “It is interesting that Allison-Madueke invited the EFCC to investigate the corruption in NNPC, PPPRA and other agencies in the oil industry considering that the greatest fraud might have taken place under her watch given the N1.4 trillion spent on subsidy just in the space of one year. We find her continued stay in office akin to the judge being the jury and the prosecutor being the defense in a case. It is this attitude to running government that fuels the anger for the ongoing protests in several parts of the country.
“For the avoidance of doubts, the home video styled invasion of PPPRA and NNPC by EFCC operatives has every semblance of what we have seen before and we know this does not usually yield any result. The civil society groups and other stakeholders have presented a petition to the EFCC. Our suggestion is that the EFCC follow up on this petition and the attached documents instead of allowing itself to be the puppet of the cabal as exemplified in the directive to investigate as issued by the Minister of Petroleum.”