TWENTY-FOUR hours after the strike called by organised labour to protest the removal of fuel subsidy was called off, the Nigerian National Petroleum Corporation (NNPC) was on the spot yesterday.

The Nigerian Customs Service (NCS) gave details of alleged corrupt practices and self-enrichment among fuel importers, particularly the NNPC, saying the oil giant embezzled N46 billion in nine years through the illegal importation and refining of the Premium Motor Spirit (PMS).

Top Customs officials, who appeared before the House of Representatives’ Farouk Lawan-led ad-hoc Committee on Subsidy Regime revealed that NNPC, since 2002, had been carrying out illegal importation of PMS and refining without payment of duties, thereby shortchanging Nigeria to the tune of N46 billion.

Julius Ndubusi, a Deputy-Controller of Customs in charge of Tariff and Importation, who led other officers, said the amount had accrued from the approved N1 per litre on PMS expected to be collected as revenue by the Customs to be paid to the federation account.

The recent allegation is coming on the heels of a similar one raised by the office of the Auditor-General of the Federation against NNPC last October where the House of Representatives heard that the corporation was owing the Federal Government about N450 billion in unremitted revenues.

Ndubusi alleged that NNPC had prevented the Customs from obtaining actual records on its importation of other petroleum products and that the NNPC was also responsible for shutting out Customs from verifying all government payments on subsidy in the last seven years.

He narrated how the NNPC, through some businessmen, bad been bringing in crude oil into the country and refines such at the Kaduna Refinery without following due process, later to be sold to unknown consumers outside the country.

Also revealed was how the NNPC has been engaging smaller vessels to round trip imported refined products from mother vessels designated to Nigerian ports in a bid to evade customs tariff.

One of the critical questions that the Petroleum Minister, Mrs Diezani Alison-Madueke, failed to provide adequate answer to was why the annual cost of subsidy rose from N630 billion in 2008 to N1.3 trillion in 2011, even on the average of $100 per barrel of 33 million volume.

The minister had cautioned the House and its committee not to criminalise the whole process of importation of petroleum products and the subsidy.

Similarly, the Chairman of NEITI, Prof. Humphrey Assis Asobie, in his testimony, said that the practice by the NNPC lacks in transparency and due process, claiming that all subsidy claims by the corporation were unable to be confirmed by NEITI’s auditors.

He said this was as a result of ambiguous information or no data on marine for shipment and transfers between Port Harcourt, Warri and Calabar where he raised concerns over smuggling of refined products into the country.

But, Lawan who chaired the Committee, expressed dismay over the position of the minister who insisted that there was no cabal in the nation’s oil industry and that the N245 billion built into the 2011 Budget as subsidy was calculated for just two months.

He further lamented that most of the revelations at the hearing were damning and disturbing, adding that the House of Representatives had realised how Nigeria is being shortchanged daily, despite efforts of government agencies to curb such criminalities.

The Committee, however, promised to dig dipper into the alleged cutting of corners by NNPC as it reiterated it will call PPPRA to appear before it today.

The House kicked against the composition of an eight-man committee by President Goodluck Jonathan to study the Petroleum Industry Bill (PIB).

The PIB, which had failed to be passed by the National Assembly in the last two years, according to the spokesperson of the House, Zakari Mohammed, was not intended to disregard the yearnings of Nigerians.

Mohammed expressed displeasure over how the President composed the membership of the committee which he said gave a body language as if the House is sabotaging the PIB and as if the House is not doing anything on it.

Meanwhile, the Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday informed the lawmakers that the ministry was against the deduction of government revenue by the NNPC from source even as she revealed that the ministry has continued to urge all revenue generating agencies to desist from the practice.

The minister also told the lawmakers that the ministry disburses the subsidy to beneficiaries after having completed the due process of verification and audit.

She, however, revealed that the NNPC deducts its subsidy at source before remitting funds into the federation accounts. The minister revealed that the ministry was embarking on agency-by-agency discussion on the issue to prevail on them to remit revenues into government coffers and wait for appropriation to off-set their expenditures.

While reacting to the comments made by the former Chairman of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Hamman Tukur, an engineer, that the government was actually not paying any subsidy on fuel, the Finance Minister cautioned that people should be careful of the kind of information they volunteer to the public.

Dr. Okonjo-Iweala told the committee that the actual landing cost of a litre of petrol is N123 while the distribution cost is put at N15.49k making the total landing cost to be at N138.49k.

She added that the subsidy paid on a litre of fuel before the latest increase stood at N78 per litre.

The minister, who was able to answer some of the issues raised, directed the Director of Budget, Bright Okogwu, to explain the underpinnings that made his office to propose the N245 billion for subsidy only to overshoot same in 2011.

In his explanation, Okogwu stated that the N245 billion proposed was just a mere estimate with the assumptions that the government would remove the fuel subsidy within the year.

He told the lawmakers that the proposal was contained in the Medium Term Expenditure Framework (MTEF) submitted to the National Assembly for consideration mid-year in 2010. He said: "As at that time, a decision had been reached at the executive level for subsidy to be removed. We had assumed that at some point in the year, the subsidy would be removed.

“Actual subsidy payable by the government was dependent on three variables which include the exchange rate, volume of local consumption and the international price of crude oil. “Subsidy is an estimate and it depends on exchange rate, volume of consumption and the international price of crude. "In 2010, the average price was $81 per barrel. That estimate was done with the best information available to the Budget Office as at that time".

Meanwhile, the House of Representatives yesterday expressed its reservations over the claim made by the government that it expended about N1.3 trillion on fuel subsidy in the 2011 fiscal year.

The lawmakers, who were not convinced about the claims, queried the Finance Minister and ordered her to furnish the House with relevant documents on fuel importation.

The lawmakers had requested the minister to explain the peculiarity in year 2011 while the National Assembly approved only N245 billion for same purpose in the budget.


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