“The lawmakers have begun debate on the report on Tuesday. At the end of the day, if
adopted, it would most likely be compressed as a document called a resolution. But what if the Executive fails to implement it? The House claims it has an answer- tit for tat”
By Chuks Akunna
Wednesday April 25 , 2012
adopted, it would most likely be compressed as a document called a resolution. But what if the Executive fails to implement it? The House claims it has an answer- tit for tat”
By Chuks Akunna
Wednesday April 25 , 2012
 |
•Sanusi & •Madueke & •Farouk LawanPhoto: Sun News Publishing
|
National attention is riveted on the House of Representatives as it begins debate on the report of its Ad-Hoc committee that investigated the Petroleum Support Fund (PSF) otherwise known as fuel subsidy.
The committee, led by a fourth-term legislator, Hon. Farouk Lawan, had last Wednesday formally presented to the entire House its findings on the administration of the fund. Hours later, it released copies of the executive summary and recommendations to the media. Since then, the Nigerian petroleum industry has not and may never remain the same.
In all, the committee discovered that petroleum industry operators had hidden behind the pillar of the fund to fleece Nigerians of over N1trillion in under three years. Leading the wolf pack was Nigerian National Petroleum Corporation (NNPC), a company which on its website claimed to “be a world class company driven by shared commitments to excellence, customer satisfaction and continuous improvement.” While the reputed excellence and customer satisfaction of this corporation remain to be seen, the lawmakers, on the other hand, claim they were able to clearly see its activities- theft of over N700 billion.
According to the lawmakers, top officials of NNPC were able to steal the monies by paying N285.098 billion in excess of the Petroleum Products Pricing and Regulating Agency (PPPRA) recommended figure for 2011, deducting N310,414,963,613 as subsidy for kerosene even when the President had cancelled such, and for illegally granting discounts on crude oil price per barrel to NNPC which it said hit N108.648 billion from 2009 to 2011. The activities, held the lawmakers, was a contravention of Section 162 of the Nigerian Constitution.
More ludicrous was PPPRA’s role. Officials of an agency set up to regulate the conduct of the players in the petroleum industry, according to the report, began helping themselves. They approved and made excess payments to the tune of N312 billion. Apparently taking a cue from the unwholesome activities of some NNPC and PPPRA officials, the independent marketers, in the words of the committee, joined the “bazaar.” This, in the estimation of the House committee, cost Nigeria N8,664,352,554.00, that is, discounting another N41,936,140,005.31 allegedly stolen by some companies.
The committee, led by a fourth-term legislator, Hon. Farouk Lawan, had last Wednesday formally presented to the entire House its findings on the administration of the fund. Hours later, it released copies of the executive summary and recommendations to the media. Since then, the Nigerian petroleum industry has not and may never remain the same.
In all, the committee discovered that petroleum industry operators had hidden behind the pillar of the fund to fleece Nigerians of over N1trillion in under three years. Leading the wolf pack was Nigerian National Petroleum Corporation (NNPC), a company which on its website claimed to “be a world class company driven by shared commitments to excellence, customer satisfaction and continuous improvement.” While the reputed excellence and customer satisfaction of this corporation remain to be seen, the lawmakers, on the other hand, claim they were able to clearly see its activities- theft of over N700 billion.
According to the lawmakers, top officials of NNPC were able to steal the monies by paying N285.098 billion in excess of the Petroleum Products Pricing and Regulating Agency (PPPRA) recommended figure for 2011, deducting N310,414,963,613 as subsidy for kerosene even when the President had cancelled such, and for illegally granting discounts on crude oil price per barrel to NNPC which it said hit N108.648 billion from 2009 to 2011. The activities, held the lawmakers, was a contravention of Section 162 of the Nigerian Constitution.
More ludicrous was PPPRA’s role. Officials of an agency set up to regulate the conduct of the players in the petroleum industry, according to the report, began helping themselves. They approved and made excess payments to the tune of N312 billion. Apparently taking a cue from the unwholesome activities of some NNPC and PPPRA officials, the independent marketers, in the words of the committee, joined the “bazaar.” This, in the estimation of the House committee, cost Nigeria N8,664,352,554.00, that is, discounting another N41,936,140,005.31 allegedly stolen by some companies.
In the beginning...
PPPRA had on January 1, 2012 announced the withdrawal of subsidy on petrol. This announcement, which came barely a week after a suicide bomber rammed a car laden with bombs into a church in Madalla, Niger State, killing scores and maiming many others, was greeted with outrage. The following days saw organized labour making good earlier threats to ground the country in the event subsidy on petrol was removed.
Thousands of demonstrators took to the streets in most parts of the country shutting down businesses, setting up bonfires and in some cases, hoodlums took over.
The government had responded by coming down hard on the protesters. Soldiers, anti- riot policemen and other security agents streamed into the streets to match the protesters force for force. At least two deaths were blamed on soldiers’ and police bullets. Anarchy and anomie reigned.
It was in the thick of this that the House of Representatives convened an emergency session. Meeting on January 8, 2012, they resolved among other things to set up an Ad-hoc Committee to verify and determine the actual subsidy requirements and monitor the implementation of the subsidy regime in Nigeria.
The Federal Government had through its economic eggheads told a bleeding nation that not only would it go broke, it would not be able to deliver on any of its campaign promises. Government had mounted what many considered a belated campaign to educate Nigerians on the dangers of retaining fuel subsidy.
One of these egg heads was Sanusi Lamido Sanusi, a Kano prince and Governor, Central Bank of Nigeria (CBN).
“Fraud, like theft,” he once posited, “thrives not only because of the existence of greed and benefit, but of opportunity.” To prove this, Sanusi asked critics of the removal of the removal of fuel subsidy to place themselves in the shoes of what he called “the average Nigerian businessman or entrepreneur -polite euphemisms for rent-seeking parasites.
“You establish an LC for importing 20,000 metric tonnes of PMS and the PPPRA says this is at a landed cost of N145, for example, per litre. So you know that for every litre in that vessel you will get at least N85 as subsidy. Now you have a number of ‘possibilities.”
One of the choices, argued Lamido, “is that you can offload 5,000 MT and bribe Customs and other officials to sign papers confirming you offloaded 20,000 MT. Then do the same across the chain with a paper trail showing you delivered 20,000MT to a tank farm, and maybe even that you transported it to Maiduguri entitling you to a share of the price equalization fund. Maybe for N20-N30 per litre you bribe all those who sign the papers. The 15,000 MT you take to Benin or Ghana or Cameroun and sell at market price thus making an additional “profit” of N55/ltr on 15,000MT”
The CBN Governor further claimed one could “just forge documents and have them stamped without bringing in anything and collect the subsidy since PPRA pays based on documents.”
The third option, the CBN Governor said, is that “you can bring in the fuel, load on tankers, sell some at N65 some at 80 some at 100, some across the land borders.”
He held that “you can do all this and no one can catch it or prove it because somebody was paid to sign off on documents. And with a high enough margin there is too much temptation to be resisted and firepower for bribing officials.”
PPPRA had on January 1, 2012 announced the withdrawal of subsidy on petrol. This announcement, which came barely a week after a suicide bomber rammed a car laden with bombs into a church in Madalla, Niger State, killing scores and maiming many others, was greeted with outrage. The following days saw organized labour making good earlier threats to ground the country in the event subsidy on petrol was removed.
Thousands of demonstrators took to the streets in most parts of the country shutting down businesses, setting up bonfires and in some cases, hoodlums took over.
The government had responded by coming down hard on the protesters. Soldiers, anti- riot policemen and other security agents streamed into the streets to match the protesters force for force. At least two deaths were blamed on soldiers’ and police bullets. Anarchy and anomie reigned.
It was in the thick of this that the House of Representatives convened an emergency session. Meeting on January 8, 2012, they resolved among other things to set up an Ad-hoc Committee to verify and determine the actual subsidy requirements and monitor the implementation of the subsidy regime in Nigeria.
The Federal Government had through its economic eggheads told a bleeding nation that not only would it go broke, it would not be able to deliver on any of its campaign promises. Government had mounted what many considered a belated campaign to educate Nigerians on the dangers of retaining fuel subsidy.
One of these egg heads was Sanusi Lamido Sanusi, a Kano prince and Governor, Central Bank of Nigeria (CBN).
“Fraud, like theft,” he once posited, “thrives not only because of the existence of greed and benefit, but of opportunity.” To prove this, Sanusi asked critics of the removal of the removal of fuel subsidy to place themselves in the shoes of what he called “the average Nigerian businessman or entrepreneur -polite euphemisms for rent-seeking parasites.
“You establish an LC for importing 20,000 metric tonnes of PMS and the PPPRA says this is at a landed cost of N145, for example, per litre. So you know that for every litre in that vessel you will get at least N85 as subsidy. Now you have a number of ‘possibilities.”
One of the choices, argued Lamido, “is that you can offload 5,000 MT and bribe Customs and other officials to sign papers confirming you offloaded 20,000 MT. Then do the same across the chain with a paper trail showing you delivered 20,000MT to a tank farm, and maybe even that you transported it to Maiduguri entitling you to a share of the price equalization fund. Maybe for N20-N30 per litre you bribe all those who sign the papers. The 15,000 MT you take to Benin or Ghana or Cameroun and sell at market price thus making an additional “profit” of N55/ltr on 15,000MT”
The CBN Governor further claimed one could “just forge documents and have them stamped without bringing in anything and collect the subsidy since PPRA pays based on documents.”
The third option, the CBN Governor said, is that “you can bring in the fuel, load on tankers, sell some at N65 some at 80 some at 100, some across the land borders.”
He held that “you can do all this and no one can catch it or prove it because somebody was paid to sign off on documents. And with a high enough margin there is too much temptation to be resisted and firepower for bribing officials.”
The probe begins...
Apparently armed with the zeal and courage, the House committee began sitting. As chairman of the committee would later admit, “we knew it wasn’t going to be easy because we knew we were going to be dealing with people who feel that they can buy anybody.” He was however quick to add that they were fortunate that the eight members had no prior dealings with the oil industry and were therefore able to ward off what he said were from very powerful quarters.
“The Committee decided that the scope of this investigation should be for three years 2009 -2011 for the following reasons:
“The actual budget expenditure on subsidy for both PMS and HHK was tolerable, being N261.1b in 2006, N278.8b in 2007 and N346.7b in 2008. 5 companies including NNPC were involved in 2006, 10 in 2007 and 19 in 2008 contrasted to 140 in 2011.
“Secondly, in line with accounting practice, the Committee decided to investigate three years activities of the scheme.
“The Committee could have chosen to limit the investigation to 2011alone given the scale of escalation of subsidy in that year alone but decided to take three years to establish a trend.
“The Ad-Hoc Committee held Public Hearings from 16th of January, 2012 to 9th of February, 2012, taking sworn testimonies from 130 witnesses, receiving information from several volunteers, and receiving in evidence over 3,000 volumes of documents,” said the committee.
Apparently armed with the zeal and courage, the House committee began sitting. As chairman of the committee would later admit, “we knew it wasn’t going to be easy because we knew we were going to be dealing with people who feel that they can buy anybody.” He was however quick to add that they were fortunate that the eight members had no prior dealings with the oil industry and were therefore able to ward off what he said were from very powerful quarters.
“The Committee decided that the scope of this investigation should be for three years 2009 -2011 for the following reasons:
“The actual budget expenditure on subsidy for both PMS and HHK was tolerable, being N261.1b in 2006, N278.8b in 2007 and N346.7b in 2008. 5 companies including NNPC were involved in 2006, 10 in 2007 and 19 in 2008 contrasted to 140 in 2011.
“Secondly, in line with accounting practice, the Committee decided to investigate three years activities of the scheme.
“The Committee could have chosen to limit the investigation to 2011alone given the scale of escalation of subsidy in that year alone but decided to take three years to establish a trend.
“The Ad-Hoc Committee held Public Hearings from 16th of January, 2012 to 9th of February, 2012, taking sworn testimonies from 130 witnesses, receiving information from several volunteers, and receiving in evidence over 3,000 volumes of documents,” said the committee.
Finding and recommendations...
“If we had compromised, we wouldn’t have had the courage to bring the calibre of people we brought, put them on oath and ask the kind of questions we did. You dont dine with a man at night and in the morning bring him to face live TV,” he argued, in response to reports his committee may have compromised.
Dissatisfied with the handling of fund, the committee directed NNPC, PPPRA and some independent marketers and companies in the process, to refund N1,06,040,456,171.31 to the federation account.
Recommended a probe of the board and management of NNPC, and the actual demurrage payments the corporation incurred between 2009 and 2011, and of two former Executive Secretaries of PPPRA.
NNPC, said the committee, is to refund N310,414,963,613.00 for violation the kerosene subsidy scheme, another N285,098,000,000.00 for exceeding PPPRA recommendation, and N108,648,000,000.00 for what it described as “self discount.”
Oil marketers, the committee recommended, are to refund N8,664,352,554.00, “companies that refused to appear” N41936,140,005.31, and N312,279,000,000.00 being PPPRA’s “excess payment to self”.
It opined that NNPC be “unbundled to make its operation more efficient and transparent,” and another need to determine its solvency” in the face of a “plethora of claims of indebtedness and demands for payments by NNPC’s debtors”.
“If we had compromised, we wouldn’t have had the courage to bring the calibre of people we brought, put them on oath and ask the kind of questions we did. You dont dine with a man at night and in the morning bring him to face live TV,” he argued, in response to reports his committee may have compromised.
Dissatisfied with the handling of fund, the committee directed NNPC, PPPRA and some independent marketers and companies in the process, to refund N1,06,040,456,171.31 to the federation account.
Recommended a probe of the board and management of NNPC, and the actual demurrage payments the corporation incurred between 2009 and 2011, and of two former Executive Secretaries of PPPRA.
NNPC, said the committee, is to refund N310,414,963,613.00 for violation the kerosene subsidy scheme, another N285,098,000,000.00 for exceeding PPPRA recommendation, and N108,648,000,000.00 for what it described as “self discount.”
Oil marketers, the committee recommended, are to refund N8,664,352,554.00, “companies that refused to appear” N41936,140,005.31, and N312,279,000,000.00 being PPPRA’s “excess payment to self”.
It opined that NNPC be “unbundled to make its operation more efficient and transparent,” and another need to determine its solvency” in the face of a “plethora of claims of indebtedness and demands for payments by NNPC’s debtors”.
Way forward?
The lawmakers have begun debate on the report on Tuesday.
At the end of the day, if adopted, it would most likely be compressed as a document called a resolution. But what if the Executive fails to implement it? The House claims it has an answer- tit for tat.
Briefing reportersat the day after, chairman, House committee on media, Hon. Zakari Mohammed, said,”We are ingenious. The Executive also would come to us for some things. We can use this as a pre-condition. It is that simple...We shall use all our legislative powers to ensure that after adoption, the report sees the light of the day.” Tough talk one may say. To others, particularly those used tothe legislators’ rhetorics, it may after all turn out to be all sound and fury, signifying nothing.
Whatever it is, this probe has offered the House a golden opportunity to redeem a sagged image. Will the 360 legislators be able to rise to the occasion? Will this go the way of other probes? Their actions and inactions in the coming weeks will tell.
SOURCE: The Sun, 25 April 2012. http://sunnewsonline.com/
The lawmakers have begun debate on the report on Tuesday.
At the end of the day, if adopted, it would most likely be compressed as a document called a resolution. But what if the Executive fails to implement it? The House claims it has an answer- tit for tat.
Briefing reportersat the day after, chairman, House committee on media, Hon. Zakari Mohammed, said,”We are ingenious. The Executive also would come to us for some things. We can use this as a pre-condition. It is that simple...We shall use all our legislative powers to ensure that after adoption, the report sees the light of the day.” Tough talk one may say. To others, particularly those used tothe legislators’ rhetorics, it may after all turn out to be all sound and fury, signifying nothing.
Whatever it is, this probe has offered the House a golden opportunity to redeem a sagged image. Will the 360 legislators be able to rise to the occasion? Will this go the way of other probes? Their actions and inactions in the coming weeks will tell.
No comments:
Post a Comment