Customs’ alarm on petrol supply, subsidy calls for probe | TrendyNewsReporters
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Customs’ alarm on petrol supply, subsidy calls for probe

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THE vexed issue of malpractices associated with petrol imports, supply, and subsidy, has bounced back forcefully into the public space. Coming under appropriative scrutiny at the House of Representatives Committee on Finance, data from the Nigerian National Petroleum Company Limited on products released and consumed daily did not add up. They never have, and this calls into question institutional practices and accountability. With a prohibitive N6.4 trillion subsidy bill haunting the 2023 federal budget, the haemorrhage must be stopped.

Once more, the NNPC’s opaque corporate culture is in focus. Its claim of releasing 98 million litres daily into the market alarmed the Minister of Finance, Budget and National Planning, Zainab Ahmed. She said that with this, subsidy would cost N6.4 trillion and result in a deficit of between N11.30 trillion and N12.41 trillion in the proposed N19.76 trillion budget.

This attracted an outraged riposte from the Comptroller-General of the Nigeria Customs Service, Hameed Ali, who punctured the NNPC’s claims.

Ali posed pertinent questions that suggested fraudulent practices at the rebranded company; “If we are consuming 60 million litres of PMS (petrol) per day, by their own computation, why would you allow the release of 98 million litres per day? … Scientifically, you cannot tell me that if I fill my tank today, tomorrow, I will fill the same tank with the same quantity of fuel.”

Dismissing the notion of smuggling accounting for the entire difference between local consumption and the market supply, he asked; “If you release 98 million litres in actual and 60 million litres is used, the balance should be 38 million litres. How many trucks will carry 38 million litres every day? Which roads are they following, and where are they carrying this thing to?”

Moreover, figures of total consumption in West Africa do not support the purported daily injection of 38 million litres smuggled from Nigeria. For years, several stakeholders, including this newspaper, have consistently questioned the volume of petrol the NNPC claims to be supplying and the attendant sums it withholds from the Federation Account to cover its mysterious “under-recoveries.” In February, the Minister of State for Petroleum Resources, Timipre Sylva, admitted that NNPC’s daily consumption figures were questionable, describing them as “crazy and opaque.”

Convincingly and courageously, the NCS CG has sketched an urgent investigative task for the anti-corruption agencies. The Economic and Financial Crimes Commission needs no further prompting to immediately launch an investigation into the entire petrol imports, supply, and subsidy system. A thorough investigation of the four non-functional refineries that continue to gulp billions of naira yearly is also imperative.

Following the failure of the government to act on the findings and recommendations of the Aigboje Aig-Imoukhuede-led Presidential Committee on Verification of Fuel Subsidy Payments in 2012, the EFCC should approach this task with single-minded doggedness. Accountability is a cardinal principle of public service; public assets should no longer be fair game for illegal primitive accumulation of wealth by a few.

In both its previous and current iterations, the NNPC allegedly persists in obfuscated practices; in downstream, this allows oil marketing companies to manipulate figures on petroleum products distribution. Corruption has for long prevented the government from acting decisively.

The price of this has become too heavy to bear for a country on the edge of possible cataclysmic economic meltdown.

Back in 1998, a government-appointed committee chaired by the renowned economist, the late Sam Aluko, reported that the NNPC management was “deliberately sabotaging” the four government-owned refineries to create opportunities for massive importation of petroleum products. Successive administrations took no decisive action.

The administration of Goodluck Jonathan in 2012 received the report of a House ad-hoc Committee on Fuel Subsidy Management, indicating that “subsidy fund totalling N1.7 trillion (over the approved budget) was illegally paid to some government agencies and oil marketers” in 2011. The follow-up Aig-Imoukhuede committee confirmed gross irregularities and recommended that 21 oil marketing and trading companies be made to refund N382 billion.

Only a few subsidy thieves were ever prosecuted, the majority went away with their loot. Corruption and impunity triumphed. This is another opportunity to check the ugly trend and unfetter the petroleum downstream subsector.

Helpfully, the NNPC has said it will welcome a forensic audit. In its defence to the CG’s position, NNPC through its spokesman, Garba-Deen Mohammed, insisted that it imported 16.46 billion litres of petrol from January to August 2022, averaging 68 million litres per day. It added that actual retail pump price is N462 per litre, prompting a subsidy of N297 per litre. Reiterating its “integrity and transparency,” Mohammed declared: “We invite any forensic audit of the PMS supply and subsidy management framework of the NNPC.”

The EFCC and the NASS should take up the challenge and insist on a contemporaneous investigation into everything else connected with the petrol subsidy regime–from import, storage, and distribution, bridging costs and Petroleum Equalisation Fund to the Petroleum Products Pricing and Regulatory Agency.

Uniformity in the pricing of petroleum products across a vast area like Nigeria is a luxury the country cannot afford. Just as it is inconceivable that government could decree uniformity in house rents, food prices, hospitality rates and transport fares across the country, it need not overreach itself by sustaining an ill-digested military era policy in the face of today’s adverse economic realities. It has only created another window for looting by corrupt officials, marketers and transporters.

Without further delay, the Petroleum Equalisation Fund, and the associated bridging costs, should go. It is a given that every locale or milieu has its distinctive elements and qualities that confer some benefits on residents. The four refineries should also be sold promptly, and appropriate incentives provided to attract new investors, including for modular refineries.

NNPC’s rebranding should not be cosmetic; the new-look entity must break completely from the corruption, mismanagement, waste, nepotism, and politicking of the past and run a compact, transparent, accountable, and profit-oriented enterprise.

Meanwhile, both the NASS and the EFCC must unravel the petrol supply and subsidy mess.

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