Subsidy probe report: Minister of Justice says government will prosecute culprits

The Minister of Justice and Attorney General of the Federation, Mohammed Adoke has assured Nigerians that he will prosecute all those who are found culpable in the subsidy report made available to the presidency.

The Minister of Justice and Attorney General of the Federation, Mohammed Adoke

Mr Adoke, who disclosed this while speaking at the presidential villa after receiving the report from the presidency, said he is taking the report to the Economic and Financial Crimes Commission (EFCC).

He however reiterated his earlier position that the cases will be properly investigated, to ensure that all loose ends are covered.

He said that the assignment will be carried out without sentiments and that whosoever is found culpable will be arraigned before a court of law.
He said that there will be no sacred cow and that government will not witch hunt anybody.

The House of Representatives ad Hoc Committee that conducted an investigative hearing on the management of the fuel subsidy fund recommended that some oil marketers and officials of both the Petroleum Products Pricing and Regulatory Agency (PPPRA) and the Nigerian National Petroleum Corporation (NNPC) be investigated and prosecuted by anti-graft agencies.

According to the report, those to be probed by anti-graft agencies are 121 oil marketers as follows:

1. 17 marketers that did not obtain FOREX but claimed to have imported petroleum products.

2. 15 marketers who obtained FOREX but did not import petroleum products.

3. 71 oil marketers to face probe and refund N230.1billion

4. 18 oil marketers committed other infractions.

Other issues for probe by the EFCC are:

How 3.171billion litres of Premium Motor Spirit (PMS) got missing. The 3.171 litres of PMS allegedly subsidised were not supplied to the Nigerian market.

Ex-PPPRA Executive Secretaries A. Ibikunle (August 2009 to February 2011) and Goddy Egbuji (February to August 2011) for further probe and trial.

Others are PPPRA’s GM Field Services, ACDO/Supervisor-Ullage Team 1 and ACDO/Supervisor-Ullage Team 2.

Ex-PPPRA Chairman Ahmadu Ali and board members reprimanded.

NNPC should be probed to determine solvency.

Those indicted in NNPC management and board between 2009 and 2011 should be prosecuted.

The report said: “The Committee identified that the marketers were often awarded superfluous quantities of products to supply but often did not meet the target.

“In 2009, PPPRA approved a supply of 11,341,507,500 litres of PMS for the marketers. However PPPRA confirmed the marketers discharged only 5,085, 206, 983 litres or 55.16 per cent under-discharge.

“Despite being aware of the under-performance by the marketers in 2009 or the defect in its procurement process and management, PPPRA increased the 2010 Approved Deliverables to 12,410,955, 000 litres. The marketers delivered only 6,226,586,543 that is 49.8 per cent under performance. In spite of the underperformance, there were no crises of product availability throughout 2011.

“This same ugly trend was maintained by PPPRA in 2011 during which it increased its approved quantity to 13,589,510,000 litres but however confirmed a delivery of 9,317,145,231 litres, an under performance by 31.4 per cent.

“(i) By PPPRA’s representation, the marketers received N680.982billion as subsidy for supplying 9,317,145,275 litres of PMS in 2011.

(ii)Curiously, PPPRA made another presentation that the marketers were paid N975.896billion for supplying 12,488,789,611 litres of PMS in 2011.

“Between (i) and (ii) above, PPPRA has confirmed that the sum of N294, 914billion was paid on 3,171,644,336 litres of PMS that might not have been supplied to the Nigerian market.

“The anomaly is hereby referred to the relevant anti-corruption agencies for further investigation.”

NNPC denies allegation of fuel subsidy report

The management of the Nigerian National Petroleum Corporation (NNPC) has denied allegations raised by the House of Representative committee probe which indicted it along with other agencies for mis-managing the sum of N1.067 trillion involved in the fuel subsidy scheme.

A press statement on Sunday by the group general manager group public affairs division of the corporation, Dr Levi Ajuonuma denied the allegation that the company made simultaneous withdrawals from two different sources to recover it subsidy claims.

The Farouk Lawan-led House of Representatives ad hoc committee on the subsidy regime management, while submitting the report indicted the NNPC, the Petroleum Products Pricing Regulatory Agency (PPPRA) and some oil marketers and called for a refund of N1.067 trillion to the nation’s treasury.

The committee also asked the NNPC to refund the over N310.42billion deductions it took illegally as subsidy arrears for kerosene supplied in 2009 and 2010, pointing out that this was made in spite of a presidential directive specifically addressed to the minister, who is also chairman of the NNPC Board of Directors.

Alluding to a part of the report which accused the NNPC of withdrawing from two different sources simultaneously to recover it subsidy claims, Dr Ajuonuma stated that “the corporation at no time made such double withdrawals”, adding that “such a claim is totally unfounded and absurd.”

The group challenged the Central Bank of Nigeria (CBN) and the ad hoc committee to provide evidence that the alleged payments were made to the corporation. “They must show authorisation for the payments as well as breakdown of the amount, purpose for the payments, beneficiary accounts in which such payments were made and the utilisation of such payments” it demanded.

The NNPC spokesman explained that rather than collecting such payments from CBN, the corporation applied such subsidy approvals as credit due to the corporation towards the cost of its domestic crude allocation.

He noted that “subsidy payments to NNPC is not based on cash remittance.” “The mechanics of subsidy recovery by NNPC is not fund-based but by way of deduction form crude cost due” adding that “the commencement of the subsidy regime there was never a time when CBN paid any money to NNPC in respect of subsidy claim.”

Dr Ajuonuma lamented that despite the presentation of all the necessary documents and information to the probe committee, such “unfounded allegation against the corporation.”

“For instance, NNPC presented to PPPPRA approvals for 2011 totalling N81billion out of which only N844.9billion has been credited to NNPC. But surprisingly the committee claimed that PPPRA approved only N504billion and that the balance was excess payment to NNPC .what logic,’’ he asked.

The oil company after reviewing the report insists that “the committee seems not to be sure of its action as its intention was really not to clarify the subsidy payments but more interested in maligning and damaging the reputation of the corporation as well as other key players of the industry.”

He also picked holes in the committees’ query of NNPC deduction of subsidy payment as a first line charge.

“The basis for the deduction of both cash calls for joint venture operations and NNPC’s subsidy payments as a first line charge on the income of the federal government is statutory and founded on the appropriation act which was passed by the national assembly. Under the said appropriation act, certain budgetary items including subsidy payments to the NNPC are listed as first line charges on the income of the federation,’’ he explained.

He further adds that “the committee accepted the cash call as first line charge yet alleged that the subsidy aspect was illegal.”

Dr Ajuonuma stated that “it is clear that the tune of the committee’s report is not only damaging to the corporation but to the entire nation.”