Subsidy regime fraught with corruption and inefficiency – Report
on APRIL 19, 2012 · in NEWS
9:41 pm
Email0

FOLLOWING the removal of subsidy on PMS on January 1, 2012 by the Federal Government of Nigeria and the attendant spontaneous social and political upheavals that greeted the policy, the House of Representatives in an emergency session on January 8, 2012 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 informed the nation of its inability to continue to pump endless amount of money into the seemingly bottomless pit that was referred to as petroleum products subsidy. It explained that the annual subsidy payment was huge, endless and unsustainable. Nigerians were led to believe that the colossal payments made were solely on PMS and HHK actually consumed by Nigerians. Government ascribed the quoted figures to upsurge in international crude price, high exchange rate, smuggling, increase in population and vehicles, etc.


R-L: Chairman Ad-hoc committee investigating Subsidy Regime Hon. Farouk Lawal; Chairman, House Committee on Media and Publicity, Hon. Mohammed Zakari; and deputy Chairman of the Committee, Hon. Victor Ogene at the briefing on fuel asubsidy report. Photo:Gbemiga Olamikan.
However, a large section of the population faulted the premise of the Government subsidy figures, maintaining that unbridled corruption and an inefficient and wasteful process accounted for a large part of the payments. To avert a clear and present danger of descent into lawlessness, the leadership of the House of Representatives took the bold and decisive action of convening the first ever Emergency Session on a Sunday (January 8, 2012), and set up the Ad-hoc Committee to verify the actual subsidy requirements of the country.

The Committee decided that the scope of this investigation should be for three years 2009 -2011 for the following reasons:

• The actual budget expendfture on subsidy for both PMS and HHK was tolerable, being N261.1 b in 2006, N278.8b in 2007 and N346.7b in 2008. 5 companies including NNPC were involved iQ 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 2011 alone 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 January 16, 2012 to February 9, 2012, taking sworn testimonies from 130 witnesses, receiving information from several volunteers, and receiving in evidence over 3,000 volumes of documents. In the course of the investigations the Ad-Hoc Committee was able to establish the following:

1.Contrary to statutory requirements and other guidelines under the Petroleum Support Fund (PSF) Scheme mandating agencies in the industry to keep reliable information data base, there seemed to be a deliberate understanding among the agencies not to do so. This lack of record keeping contributed in no small measure to the decadence and rots the Committee found in the administration of the PSF. This is evident also in the budget preparatory process by MDAs where adequate data is not made available to the National Assembly. The Committee had to resort to forensic analysis and examination of varied and external sources (including the Lloyds List Intelligence) to verify simple transactions. In this regard, the PPPRA is strongly urged to publish henceforth, the PSF accounts on quarterly basis to ensure transparency and openness of the subsidy scheme.

2. We found out that the subsidy regime, as operated between the period under review (2009 and 2011), were fraught with endemic corruption and entrenched inefficiency. Much of the amount claimed to have been paid as subsidy was actually not for consumed PMS. Government officials made nonsense of the PSF Guidelines due mainly to sleaze and, in some other cases, incompetence. It is, therefore, apparent that the insistence by top government officials that the subsidy figures was for products consumed was a clear attempt to mislead the Nigerian people.

3. Thus, contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant-General of the Federation put forward a figure ofN1.6 trillion, the CBN N1.7 trillion, while the Committee established subsidy payment of N2,587.087 trillion as at December 31, 2011, amounting to more than 900 per cent over the appropriated sum of N245 billion. This figure of N2, 587.087 trillion is based on the CBN figure of N844.944 billion paid to NNPC, in addition to another figure of N847.942 billion reflected as withdrawals by NNPC from the excess crude naira account, as well as the sum of N894.201 billion paid as subsidy to the Marketers.

NNPC withdraws from two sources

The figure of N847.942 billion quoted above strongly suggests that NNPC might have been withdrawing from two sources especially when the double withdrawals were also reflected both in 2009 and in 2010.

However, it should be noted that as at the time the public hearing was concluded, there were outstanding claims by NNPC and the Marketers in excess of N270 billion as subsidy payments for 2011. Whereas the mandate of the Committee was necessitated by the removal of subsidy, the Committee found out that subsidy payment on kerosene formed an Integra part of the total sum.

4. On its part, NNPC was found not to be accountable to any body or authority. The Corporation, in 2011, processed payment of N310.4 billion as 2009 – 2011 arrears of subsidy on Kerosene, contrary to a Presidential Directive which removed subsidy on Kerosene in 2009. The Corporation also processed for itself, direct deduction of subsidy payment from amounts it received from other operations such as joint venture before paying the balance to the Federation Account, thereby depleting the shares of States and Local Governments from the distributable pool. Worse still, the direct deduction in 2011 alone, which amounted to N847.942 billion, was effected without any provision in the Appropriation Act.

5. While NNPC feasted on the Federation Account to bloat the subsidy payable, some of the marketers were involved in claiming subsidy on products not supplied. PPPRA laid this foundation by allocating volumes of products each quarter to the marketers which it knew were not in conformity with its own guidelines for participation.

6. Our investigation further revealed that certain marketers collected subsidy of over N230.184 billion on PMS volume of 3,262,960,225 litres that from the records made available to us were not supplied. Apart from proliferation and non-designation of bank accounts for subsidy payment, PPPRA and the OAGF were unable to manage in a transparent manner the two accounts they chose to disclose. There were indications that PPPRA paid N158 billion to itself in 2009 and N157 billion in 2010. When confronted, the OAGF was unable to submit details of the bulk payments arrogated to PPPRA and the account from which the bulk sums were disbursed to the supposed beneficiaries.

7.Curiously too, the particular Accountant-General that served during the period 2009 was found to have made payments of equal instalments of N999 million for a record 128 times within 24 hours on January 12 and 13, 2009, totalling N 127.872 billion. The confirmed payments from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the Committee. We, however, discovered that only 36 marketers were participants under the PSF Scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payments.

Over-invoiced volume

8. In order to arrive at a probable figure of dailyconsumption of PMS, the Committee took the entire volume of 14,787,152,340 litres imported by marketers and NNPC in 2011 as recorded by PPPRA and then deducted what we suspected as over-invoiced volume of 3,276,949,993. Thus, the actual volume imported for year 2011 was 11,510,202,347. This manifested into an average daily PMS consumption of 31.5 million litres.

9. However, in 2012 marginal increment of 1.5 million litres a day is recommended in order to take care of unforeseen circumstances, bringing it to 33 million litres per day. And to maintain a strategic reserve, an additional average of seven million litres per day (or 630 million litres per quarter) for the first quarter of 2012 only is recommended. Thus, PPPRA is to use 40 million litres of PMS in the first quarter as its maximum ordering quantity per day. In subsequent quarters PMS daily ordering quantity should be 33 million litres per day. For Kerosene, the Committee recommends a daily ordering quantity of nine million litres.

10. On the issue of kerosene subsidy, the Committee strongly advocated for a Government policy to immediately recommence subsidy payment on the product by urging withdrawal of the 2009 Presidential Directive.

11. We also proposed a budget amount of N806.766billion for the 2012 fiscal year for payment of subsidy on PMS and Kerosene.

12. For the 2012 Appropriation Act, the Committee’s recommendation is based on the following: PMS: 33,000,000 Litres x N44 (subsidy) x 365 days = N529,980,000.00 Provision for strategic reserve for 1st Quarter of 2012: 7,000,000 x N44 (subsidy) x 90 days N27,720,000.00 HHK 9,000,000 litres x N101 (subsidy) x 274 days = N249,006,000.00 Total N806,766,000,000.00

Note: Commencement of kerosene subsidy is as from the second quarter of 2012, since the Committee is of the opinion that the product is still not under the subsidy regime. Therefore, the Committee recommends the sum of N806.766billion as subsidy for year 2012.

13. With regards to the 445,000 bpd allocation to NNPC, the Committee believes that with the current refining capacity of 53 per cent and the SWAP/Offshore processing arrangement of the balance of 47 per cent, it is sufficient to provide the nation with the following products:

a. 40 Million Litres Per Day (MLPD) of PMS, b.10 MLPD of Kerosene (HHK) c. 8.97 MLPD of Diesel (AGO) d. 0.62 MLPD of LPG and e. 2.31 MLPD of FO

It is only AGO whose average daily consumption of 12 million Litres per day will not be achieved in full. Since AGO has been deregulated, other marketers can make up for the 3.03 MLPD AGO shortfalls. The implication of this finding is that if NNPC properly manages the allocation of 445 bpd efficiently, the availability of the products can be achieved by the NNPC alone. This contrasts the situation where in 2009-2011 NNPC got the daily allocation of 445,000bpd and the nation still had to import through Marketers.

Curiously, although NNPC confirmed that it makes some savings of about N11.00 per litre refining locally than import, it could not be established that the Corporation reflects this cost differential in its claims to subsidy.

The Committee recommends that NNPC be unbundled to make its operations more efficient and transparent and this we believe can be achieved through the passage of a well drafted and comprehensive PIB Bill. All those in the Management and Board of the NNPC directly involved in the infractions identified for the years 2009-2011 should be investigated and prosecuted for abuse of office by the relevant anti­corru ption agencies.

14. Part of the funding sources of the PSF Account is over-recovery from marketers. This accrues when product landing cost is·lower than the Ex-Depot price. The Committee observed that:

i. In 2009, there was an over-recovery of N2.766 Billion. This was expected to have been credited to the PSF Account but was not traceable to the official PSF Account disclosed.

ii. Furthermore, in the presentation made by Akintola Williams Deloitte it was claimed that the sum of NGNS.27Biliion was established as over­recovery in 2099, however, there was no evidence that this money was credited to the PSF Account.

15. It is our view that the Guidelines of the PSF Scheme, even as watered down by the Board in 2009, could have salvaged the Scheme if they were observed and enforced. Had the staff of various agencies and government officials not compromised and colluded with certain marketers, the level of corruption would have been minimal. The Committee viewed this fact with serious concern and has suggested measures to ensure that impunity is no longer condoned. Therefore, marketers that had short-changed Nigerians were identified and recommended to make refunds within a time-frame of three months; civil servants were to be sanctioned in accordance with the Civil Service Rules as well as under extant Laws; management staff and top government officials were, based on the gravity of their offences, to be reprimanded, re-deployed, dismissed and, In specific cases, prosecuted for abuse of office and fraudulent practices.

16. The Committee recommended the refund to the treasury the sum of N1, 067,040,456,171.31 trillion from the under listed for various violations.

i.) NNPC (Kerosene Subsidy)’ N310,414,963,613.00

ii.) NNPC (Above PPRA recommendation) – N285,098,000,000.00

iii.) NNPC (Self discount) - N108,648,000,000.00

iv.) Marketers (Total violations, of PSF) N8,664,352,554.00

v.) Companies that refused to appear N41,936,140,005.31

vi.) PPPRA excess paymenLto self N312,279,000,000.00

TOTAL N1,067,040,456,171.31

The Committee believes that if the PSF scheme was properly managed, this sum of N1.070 trillion would have been available to the three tiers of Government for budget enhancement.

17. The Committee recommends that the following transactions be further investigated by the relevant anti-corruption agencies and determine their level of culpability with a view to making further recoveries;

i. Payment of N999m to unnamed entities 128 times to the tune of N127.872 billion

ii. Companies who collected Forex to the tune of $402.610 billion whose utilization is questionable to the Committee.

iii. The 72 Companies listed under the.financial forensics are hereby recommended for further investigation by the relevant anti­-corruption agencies with a view to establishing their culpability and recovering the sums indicated against their names totalling N230, 184,605,691.00.

iv. The Over recoveries of N2.766 billion and N5.27 billion which were not accounted for by the office of the Accountant General of the Federation.

v. The cases of double deductions by the NNPC for sUbsidy payments in 2009,2010 and 2011 mentioned in this Report.

http://www.vanguardngr.com/2012/04/subsidy-regime-fraught-with-corruption-and-inefficiency-report/

Mrs. Alison-Madueke is also to have her powers whittled as the House committee recommended the appointment of two oil ministers--one in charge of upstream, the other handling downstream.

The report recommended the prosecution of members of the boards and managements of the Nigerian National Petroleum Corporation and the Petroleum Products Pricing and Regulatory Agency, who are found wanting, for making unauthorised deductions of hundreds of billions during the period.

The indictments cover past and serving management of the two agencies, and the report recommended the sack of present NNPC management led by Mr. Austen Oniwon.

Appoint 2 oil ministers ke? I thought we are going broke with expenditure cost? Kai, what did Nigerians do to deserve all these clueless idiooooots in office??

If you like, appoint 7Million ministers, nothing will change until you start punishing people for their incompetence and corruption.

na so so corruption and big money we dey hear....when will these thieves start dying one by one so we could just rightly possess the land we are tired of all these money stories..NEXT..

Look at the sums of money that were stolen; WOW.

Jonathan MUST sack Allison. EFCC MUST take Allison and Ahmadu Ali to London to face corruption trial!!!!! Ogwuchaa ka oha m

Can someone please summarize this post

braine: Can someone please summarize this post

[size=24pt]CORRUPTION[/size]

It is quite obvious that our money is up to that amount.i believe that the time to end this and give every citizen a sense of belonging is here.thank God for my brother and inlaw GEJ more gresse to your elbows

Oju ole re ole

Kilode?!:


Appoint 2 oil ministers ke? I thought we are going broke with expenditure cost? Kai, what did Nigerians do to deserve all these clueless idiooooots in office??

If you like, appoint 7Million ministers, nothing will change until you start punishing people for their incompetence and corruption.

Just my thought brother. That will amount to duplication of functions and waste of tax payers money. It is a stark embarrassment on the intelligen of Nigerians to note that our leaders are actually poverty of ideas that will move this country forward. How would 2 oil thieves ministers stop the endemic corruptn in the system? of course they can always partner in corruption. Our leaders should stop living in denial and see corruption in the corridor of govt as the bane of development, and work effortlessly to eliminate same, else they are however inviting revolution which should not be seen as impossible in Nigeria.

I didn't need to read this report to know that Nigerian politicians and top civil servants are diabolically corrupt. I was watching GEJ on TV talking about Nigeria in Germany yesterday and the man did not believe in himself and what he was saying, he was just all-so-jittery. God please give me a Nigerian President I can be proud-of soon.

Who is able to read the whole of that report? Even my literature review in my first degree wasn't as much as this

sayso:

[size=24pt]CORRUPTION[/size]

Hee hee heee. Nice summary i swear.

Unfortunately I doubt anything concrete will come out of the probe.

At best, some people will be questioned, some committees set up, story ends and new set of more careful looters will emerge.

I weep for Nigeria.

God pls help us, pls help us reclaim this country if not for ourselves but for our children. We shouldn't allow this happen. I am part of nigerias problem, I voted for GEJ. Ahhhhhhhh. Pls God hear our cries IJN

probably: God pls help us, pls help us reclaim this country if not for ourselves but for our children. We shouldn't allow this happen. I am part of nigerias problem, I voted for GEJ. Ahhhhhhhh. Pls God hear our cries IJN

Hahahahah! See confession .

ypzilanti: Subsidy regime fraught with corruption and inefficiency – Report
on APRIL 19, 2012 · in NEWS
9:41 pm
Email0

FOLLOWING the removal of subsidy on PMS on January 1, 2012 by the Federal Government of Nigeria and the attendant spontaneous social and political upheavals that greeted the policy, the House of Representatives in an emergency session on January 8, 2012 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 informed the nation of its inability to continue to pump endless amount of money into the seemingly bottomless pit that was referred to as petroleum products subsidy. It explained that the annual subsidy payment was huge, endless and unsustainable. Nigerians were led to believe that the colossal payments made were solely on PMS and HHK actually consumed by Nigerians. Government ascribed the quoted figures to upsurge in international crude price, high exchange rate, smuggling, increase in population and vehicles, etc.


R-L: Chairman Ad-hoc committee investigating Subsidy Regime Hon. Farouk Lawal; Chairman, House Committee on Media and Publicity, Hon. Mohammed Zakari; and deputy Chairman of the Committee, Hon. Victor Ogene at the briefing on fuel asubsidy report. Photo:Gbemiga Olamikan.
However, a large section of the population faulted the premise of the Government subsidy figures, maintaining that unbridled corruption and an inefficient and wasteful process accounted for a large part of the payments. To avert a clear and present danger of descent into lawlessness, the leadership of the House of Representatives took the bold and decisive action of convening the first ever Emergency Session on a Sunday (January 8, 2012), and set up the Ad-hoc Committee to verify the actual subsidy requirements of the country.

The Committee decided that the scope of this investigation should be for three years 2009 -2011 for the following reasons:

• The actual budget expendfture on subsidy for both PMS and HHK was tolerable, being N261.1 b in 2006, N278.8b in 2007 and N346.7b in 2008. 5 companies including NNPC were involved iQ 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 2011 alone 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 January 16, 2012 to February 9, 2012, taking sworn testimonies from 130 witnesses, receiving information from several volunteers, and receiving in evidence over 3,000 volumes of documents. In the course of the investigations the Ad-Hoc Committee was able to establish the following:

1.Contrary to statutory requirements and other guidelines under the Petroleum Support Fund (PSF) Scheme mandating agencies in the industry to keep reliable information data base, there seemed to be a deliberate understanding among the agencies not to do so. This lack of record keeping contributed in no small measure to the decadence and rots the Committee found in the administration of the PSF. This is evident also in the budget preparatory process by MDAs where adequate data is not made available to the National Assembly. The Committee had to resort to forensic analysis and examination of varied and external sources (including the Lloyds List Intelligence) to verify simple transactions. In this regard, the PPPRA is strongly urged to publish henceforth, the PSF accounts on quarterly basis to ensure transparency and openness of the subsidy scheme.

2. We found out that the subsidy regime, as operated between the period under review (2009 and 2011), were fraught with endemic corruption and entrenched inefficiency. Much of the amount claimed to have been paid as subsidy was actually not for consumed PMS. Government officials made nonsense of the PSF Guidelines due mainly to sleaze and, in some other cases, incompetence. It is, therefore, apparent that the insistence by top government officials that the subsidy figures was for products consumed was a clear attempt to mislead the Nigerian people.

3. Thus, contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant-General of the Federation put forward a figure ofN1.6 trillion, the CBN N1.7 trillion, while the Committee established subsidy payment of N2,587.087 trillion as at December 31, 2011, amounting to more than 900 per cent over the appropriated sum of N245 billion. This figure of N2, 587.087 trillion is based on the CBN figure of N844.944 billion paid to NNPC, in addition to another figure of N847.942 billion reflected as withdrawals by NNPC from the excess crude naira account, as well as the sum of N894.201 billion paid as subsidy to the Marketers.

NNPC withdraws from two sources

The figure of N847.942 billion quoted above strongly suggests that NNPC might have been withdrawing from two sources especially when the double withdrawals were also reflected both in 2009 and in 2010.

However, it should be noted that as at the time the public hearing was concluded, there were outstanding claims by NNPC and the Marketers in excess of N270 billion as subsidy payments for 2011. Whereas the mandate of the Committee was necessitated by the removal of subsidy, the Committee found out that subsidy payment on kerosene formed an Integra part of the total sum.

4. On its part, NNPC was found not to be accountable to any body or authority. The Corporation, in 2011, processed payment of N310.4 billion as 2009 – 2011 arrears of subsidy on Kerosene, contrary to a Presidential Directive which removed subsidy on Kerosene in 2009. The Corporation also processed for itself, direct deduction of subsidy payment from amounts it received from other operations such as joint venture before paying the balance to the Federation Account, thereby depleting the shares of States and Local Governments from the distributable pool. Worse still, the direct deduction in 2011 alone, which amounted to N847.942 billion, was effected without any provision in the Appropriation Act.

5. While NNPC feasted on the Federation Account to bloat the subsidy payable, some of the marketers were involved in claiming subsidy on products not supplied. PPPRA laid this foundation by allocating volumes of products each quarter to the marketers which it knew were not in conformity with its own guidelines for participation.

6. Our investigation further revealed that certain marketers collected subsidy of over N230.184 billion on PMS volume of 3,262,960,225 litres that from the records made available to us were not supplied. Apart from proliferation and non-designation of bank accounts for subsidy payment, PPPRA and the OAGF were unable to manage in a transparent manner the two accounts they chose to disclose. There were indications that PPPRA paid N158 billion to itself in 2009 and N157 billion in 2010. When confronted, the OAGF was unable to submit details of the bulk payments arrogated to PPPRA and the account from which the bulk sums were disbursed to the supposed beneficiaries.

7.Curiously too, the particular Accountant-General that served during the period 2009 was found to have made payments of equal instalments of N999 million for a record 128 times within 24 hours on January 12 and 13, 2009, totalling N 127.872 billion. The confirmed payments from the CBN records were made to beneficiaries yet to be disclosed by the OAGF or identified by the Committee. We, however, discovered that only 36 marketers were participants under the PSF Scheme during this period. Even if there were 128 marketers, it was inconceivable that all would have imported the same quantity of products to warrant equal payments.

Over-invoiced volume

8. In order to arrive at a probable figure of dailyconsumption of PMS, the Committee took the entire volume of 14,787,152,340 litres imported by marketers and NNPC in 2011 as recorded by PPPRA and then deducted what we suspected as over-invoiced volume of 3,276,949,993. Thus, the actual volume imported for year 2011 was 11,510,202,347. This manifested into an average daily PMS consumption of 31.5 million litres.

9. However, in 2012 marginal increment of 1.5 million litres a day is recommended in order to take care of unforeseen circumstances, bringing it to 33 million litres per day. And to maintain a strategic reserve, an additional average of seven million litres per day (or 630 million litres per quarter) for the first quarter of 2012 only is recommended. Thus, PPPRA is to use 40 million litres of PMS in the first quarter as its maximum ordering quantity per day. In subsequent quarters PMS daily ordering quantity should be 33 million litres per day. For Kerosene, the Committee recommends a daily ordering quantity of nine million litres.

10. On the issue of kerosene subsidy, the Committee strongly advocated for a Government policy to immediately recommence subsidy payment on the product by urging withdrawal of the 2009 Presidential Directive.

11. We also proposed a budget amount of N806.766billion for the 2012 fiscal year for payment of subsidy on PMS and Kerosene.

12. For the 2012 Appropriation Act, the Committee’s recommendation is based on the following: PMS: 33,000,000 Litres x N44 (subsidy) x 365 days = N529,980,000.00 Provision for strategic reserve for 1st Quarter of 2012: 7,000,000 x N44 (subsidy) x 90 days N27,720,000.00 HHK 9,000,000 litres x N101 (subsidy) x 274 days = N249,006,000.00 Total N806,766,000,000.00

Note: Commencement of kerosene subsidy is as from the second quarter of 2012, since the Committee is of the opinion that the product is still not under the subsidy regime. Therefore, the Committee recommends the sum of N806.766billion as subsidy for year 2012.

13. With regards to the 445,000 bpd allocation to NNPC, the Committee believes that with the current refining capacity of 53 per cent and the SWAP/Offshore processing arrangement of the balance of 47 per cent, it is sufficient to provide the nation with the following products:

a. 40 Million Litres Per Day (MLPD) of PMS, b.10 MLPD of Kerosene (HHK) c. 8.97 MLPD of Diesel (AGO) d. 0.62 MLPD of LPG and e. 2.31 MLPD of FO

It is only AGO whose average daily consumption of 12 million Litres per day will not be achieved in full. Since AGO has been deregulated, other marketers can make up for the 3.03 MLPD AGO shortfalls. The implication of this finding is that if NNPC properly manages the allocation of 445 bpd efficiently, the availability of the products can be achieved by the NNPC alone. This contrasts the situation where in 2009-2011 NNPC got the daily allocation of 445,000bpd and the nation still had to import through Marketers.

Curiously, although NNPC confirmed that it makes some savings of about N11.00 per litre refining locally than import, it could not be established that the Corporation reflects this cost differential in its claims to subsidy.

The Committee recommends that NNPC be unbundled to make its operations more efficient and transparent and this we believe can be achieved through the passage of a well drafted and comprehensive PIB Bill. All those in the Management and Board of the NNPC directly involved in the infractions identified for the years 2009-2011 should be investigated and prosecuted for abuse of office by the relevant anti­corru ption agencies.

14. Part of the funding sources of the PSF Account is over-recovery from marketers. This accrues when product landing cost is·lower than the Ex-Depot price. The Committee observed that:

i. In 2009, there was an over-recovery of N2.766 Billion. This was expected to have been credited to the PSF Account but was not traceable to the official PSF Account disclosed.

ii. Furthermore, in the presentation made by Akintola Williams Deloitte it was claimed that the sum of NGNS.27Biliion was established as over­recovery in 2099, however, there was no evidence that this money was credited to the PSF Account.

15. It is our view that the Guidelines of the PSF Scheme, even as watered down by the Board in 2009, could have salvaged the Scheme if they were observed and enforced. Had the staff of various agencies and government officials not compromised and colluded with certain marketers, the level of corruption would have been minimal. The Committee viewed this fact with serious concern and has suggested measures to ensure that impunity is no longer condoned. Therefore, marketers that had short-changed Nigerians were identified and recommended to make refunds within a time-frame of three months; civil servants were to be sanctioned in accordance with the Civil Service Rules as well as under extant Laws; management staff and top government officials were, based on the gravity of their offences, to be reprimanded, re-deployed, dismissed and, In specific cases, prosecuted for abuse of office and fraudulent practices.

16. The Committee recommended the refund to the treasury the sum of N1, 067,040,456,171.31 trillion from the under listed for various violations.

i.) NNPC (Kerosene Subsidy)’ N310,414,963,613.00

ii.) NNPC (Above PPRA recommendation) – N285,098,000,000.00

iii.) NNPC (Self discount) - N108,648,000,000.00

iv.) Marketers (Total violations, of PSF) N8,664,352,554.00

v.) Companies that refused to appear N41,936,140,005.31

vi.) PPPRA excess paymenLto self N312,279,000,000.00

TOTAL N1,067,040,456,171.31

The Committee believes that if the PSF scheme was properly managed, this sum of N1.070 trillion would have been available to the three tiers of Government for budget enhancement.

17. The Committee recommends that the following transactions be further investigated by the relevant anti-corruption agencies and determine their level of culpability with a view to making further recoveries;

i. Payment of N999m to unnamed entities 128 times to the tune of N127.872 billion

ii. Companies who collected Forex to the tune of $402.610 billion whose utilization is questionable to the Committee.

iii. The 72 Companies listed under the.financial forensics are hereby recommended for further investigation by the relevant anti­-corruption agencies with a view to establishing their culpability and recovering the sums indicated against their names totalling N230, 184,605,691.00.

iv. The Over recoveries of N2.766 billion and N5.27 billion which were not accounted for by the office of the Accountant General of the Federation.

v. The cases of double deductions by the NNPC for sUbsidy payments in 2009,2010 and 2011 mentioned in this Report.

http://www.vanguardngr.com/2012/04/subsidy-regime-fraught-with-corruption-and-inefficiency-report/

...why?

Subsidy probe...power probe...pension fund probe...police fund probe...securities and exchange commission probe...my probe...your probe........it is only me that feels we are moving in endless circles

Is our problem really corruption or systemic?

As long as the systems tries to create conditions where the profit of being corrupts outweighs the risk, we will just have to be a nation of probe-rs...

Oya....where and what is the next probe?? customs funds, army funds?

A misguided set of people indeed!!

DaLover: Subsidy probe...power probe...pension fund probe...police fund probe...securities and exchange commission probe...my probe...your probe........it is only me that feels we are moving in endless circles

Is our problem really corruption or systemic?

As long as the systems tries to create conditions where the profit of being corrupts outweighs the risk, we will just have to be a nation of probe-rs...

Oya....where and what is the next probe?? customs funds, army funds?

A misguided set of people indeed!!

I guess the next question is:

Why can't this administration just get radical and do the needful?

GEJ can Spend his political capital to overhaul this system and if it cost him the next re-election ( I doubt it will) then he leaves with his head high, knowing he helped Nigerians to move closer towards a better system, saving coming generations a lot of headache.


GEJ is in a good position to do these reforms, but I'm afraid, it appears he lacks the will for it.

“President Jonathan, 54, possesses the qualities needed at this moment of great challenges, having come to power at a crucial moment in the history of Nigeria. The country has grown out of its past of corruption, mismanagement and brutality, but the foundation of good governance is still fragile.
“In two short years, President Jonathan has shown the same dexterity he demonstrated as governor of Bayelsa, the same ability to find the remedies to the many complexities of running a nascent democracy.
“He has spearheaded the fight against corruption and turned Nigeria into an example of good governance. He has also made a significant impact on consolidating peace and security in West Africa. From the onset of our own crisis, Liberia has benefitted from the support of Nigeria.
“President Jonathan not only upheld the trend but added to it. With leaders like President Jonathan, Africa is sure to move toward prosperity, freedom and dignity for all of its people.

so much for the bs from time magazine

Kilode?!:


I guess the next question is:

Why can't this administration just get radical and do the needful?

GEJ can Spend his political capital to overhaul this system and if it cost him the next re-election ( I doubt it will) then he leaves with his head high, knowing he helped Nigerians to move closer towards a better system, saving coming generations a lot of headache.


GEJ is in a good position to do these reforms, but I'm afraid, it appears he lacks the will for it.

You mean do the needful like removing subsidy?
I totally agree with you on the need to be radical, and that is my grouse with GEJ...it not about the individuals but the system that encourages laziness and corruption....unfortunately many nairalanders and Nigerians are ready to lay down their lives to continue being spoon feed to a lazy stupor.


it pains me to the bone when a set of people readily mobilize thousands to agitate for free stuff which by the way is not a human right, instead of advocating for a situation that would generate massive employment..

How people expect to have intelligent leadership without intelligent opposition really baffles me..

There was/is anarchy in the industry.

There was/is corruption without hindrance (check).

The mess must be sanitize. How? Because EFCC = Zero.

This is too bad. Hisssssssssssssss.

They are thiefffffffsssssssss.

The cabalsssss.

Kilode?!:


I guess the next question is:

Why can't this administration just get radical and do the needful?

GEJ can Spend his political capital to overhaul this system and if it cost him the next re-election ( I doubt it will) then he leaves with his head high, knowing he helped Nigerians to move closer towards a better system, saving coming generations a lot of headache.


GEJ is in a good position to do these reforms, but I'm afraid, it appears he lacks the will for it.

You gave the best advise, even if the president do nothing to fight corruption he may not retun to power in 2015. Everything depend on God wishes.

If he fail to return he will forever regreting of not do the right thing at right time.

juman:
You gave the best advise, even if the president do nothing to fight corruption he may not retun to power in 2015. Everything depend on God wishes.

If he fail to return he will forever regretting of not do the right thing at right time.

If you interpret fighting corruption as showing politicians as movie stars on ait and nta, slao staring EFCC, he may be doing nothing....but if you can see a fight on corruption as also removing the environmental conditions that make unlimited and brazenly unchecked corruption possible then he is going a lot.

Removing the fuel subdity was one of those ways..

OAM4J: Unfortunately I doubt anything concrete will come out of the probe.

At best, some people will be questioned, some committees set up, story ends and new set of more careful looters will emerge.

The sad truth! This might all end in a couple more weeks and we will all go back to living as if this never happened.

It remains to be seen if this Administration,that REFUSED TO INVESTIGATE THE MANY CORRUPTION CLAIMS in the Subsidy Program PRE-REMOVAL, will now be motivated to ensure that those who failed us, and the system, be brought to book. At the end of the day, this problem only tells us the people who are tainted in some way, and reveals the Government agencies involved. However, justice for the Nigerian people, at the end of the day, is still another story.

Kobojunkie:

The sad truth! This might all end in a couple more weeks and we will all go back to living as if this never happened.

It remains to be seen if this Administration,that REFUSED TO INVESTIGATE THE MANY CORRUPTION CLAIMS in the Subsidy Program PRE-REMOVAL, will now be motivated to ensure that those who failed us, and the system, be brought to book. At the end of the day, this problem only tells us the people who are tainted in some way, and reveals the Government agencies involved. However, justice for the Nigerian people, at the end of the day, is still another story.

Na wa, you are always so shallow...

juman:
You gave the best advise, even if the president do nothing to fight corruption he may not retun to power in 2015. Everything depend on God wishes.

If he fail to return he will forever regreting of not do the right thing at right time.

WTF has God got to do with corruption and awful leadership in Nigeria? Do you think God is deaf not to have heard prayers of suffering Nigerians?(Millions of them)
Or maybe he is expecting us to do the right thing come 2015 by electing the right people, without tribal or religious sentiments!!

this is complete madness.if my calculations is correct whichmeans using the scale of 100 naira to 1dollar
one trillion should be around 10billion us dollars .whaooooooooooo.this country is dead