Full Report of the Ad-Hoc Committee on the subsidy regime in Nigeria

Channels Television  
Updated April 21, 2012

Following the removal of subsidy on PMS on the 1st day of January, 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 the 8th of January, 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 rampant 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. 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 (8th January, 2012), and set up the,Ad-hoc Committee to verify the actual subsidy requirements of the country.

For a full report of the Ad-Hoc Committee click here to view

And two months after the fuel subsidy saga, Nigerians waited anxiously for the outcome of the report.

On Thursday the April 19 2012, the Chairman of the House of Representative ad-hoc committee that investigated the management of the country’s fuel subsidy scheme, Farouk Lawan on Thursday said that attempts were made to influence the outcome of the committee’s report.

Addressing a press conference at the National assembly, Abuja, Mr Lawan said the pressure came from government officials and oil marketers.

“Yes, there was pressure, pressure from so many quarters,” he said.

Though Mr Lawan refused to disclose the names of the government officials who pressurized him and his colleagues in the committee, he said the officials said they were concern of the effect the report will have on the country.

He said that his committee made it clear to those mounting pressure on them that as far as they are not guilty of short changing Nigerians, there was no need to panic.

Also speaking at the meeting, the spokesman of the Houses of Representative, Zakari Mohammed assured Nigeria that the House of Representatives will ensure that the report, when adopted by the house is fully implemented.

After months of delay, the Lawan-led House of Representatives ad hoc committee on the subsidy regime management, on Wednesday, submitted its report with recommendation that the Nigerian National Petroleum Corporation (NNPC), the Petroleum Products Pricing Regulatory Agency (PPPRA) indicted oil marketers and companies that refused to appear before the panel to refund the sum of N1.067 trillion to the nation’s treasury.

The House has, however, slated next Tuesday for the consideration of the report.

Executive summary of the report made available to journalists on Wednesday recommended that, “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.”

The committee also recommended the refund to the treasury, the sum of N1,067,040,456,171.31 from the underlisted for various violations; NNPC (kerosene subsidy) N310,414, 963,613; NNPC (above PPPRA recommendation) N285,098,000,000; NNPC (self-discount), N108,648,000,000; marketers (total violation of petroleum subsidy fund) N8,664,352,554; companies that refused to appear, N41,936,140,005 and PPPRA, excess payment to self, N312,279,000,000.

To this end, the panel recommended that the sum of N806,766 billion be budgeted as subsidy for 2012, adding that “we also proposed a budget amount of N806,766 billion for the 2012 fiscal year for payment of subsidy on PMS and kerosene.”

The committee, also in its report, recommended 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 Petroleum Industry Bill (PIB).”

The committee as well recommended that all those on the management board of the NNPC directly involved in the in-fractions identified for 2009 to 2011 be investigated and prosecuted for abuse of office by the relevant anti-corruption agencies.

The panel further indicated that NNPC was found not to be accountable to anybody or authority, saying that “the corporation, in 2011, processed payment of N310.4 billion as 2009 to 2011 arrears of subsidy on kerosene, contrary to a presidential directive which removed subsidy on kerosene in 2009.”

The panel also reprimanded the chairman and entire members of the board of PPPRA from 2009 to 2011 for their decision.

Allegation of doctored report

A group Legislative Integrity Assembly said on Wednesday that the report of the House committee into the probe of fuel subsidy was “apparently doctored” following conflicting details about the report in the media in recent weeks.

The group, in a statement said that it noticed a number of inconsistencies having followed the snippets of information released on the committee’s report in recent weeks.

The group said that it had followed closely the situation in the ad hoc committee since it concluded its public hearing on the matter, adding that lots of inconsistencies have come out of the House in recent times.

The group, which claimed to have seen the original recommendations of the committee, said that the report submitted by Mr Lawan to the House on Wednesday was an “edited, doctored report.”

“The list of indicted companies suddenly got shortened within 24 hours. This country is in trouble if this is allowed to go unchallenged. It just confirmed that probes in this country are not to be taken seriously,” the group alleged.

It said it was not entirely taken by surprise by the doctoring because a major newspaper reported on Wednesday that there might be “eleventh hour” changes in the report following outcries generated by media reports of its recommendations.

The Guardian had reported on Wednesday that allegations of doctoring of the report had stirred a controversy in the House.

The report said there were speculations that the leadership of the House had seized the report of the Lawan committee with a view to effecting some changes. The newspaper, however, quoted House spokesman as saying that the allegations are not true.