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Subsidy Report: Details on How NNPC and PPPRA Mismanaged TRILLIONS of Naira

By on April 19, 2012

The Honourable Farouk Lawan led ad-hoc Committee on Fuel Subsidy Investigation submitted its report to the House yesterday and its revelations highlight the vast depth and breadth of corruption in Nigeria, especially in the oil sector. The committee’s report called on those who mismanaged the fund to refund N 1.07 trillion to the country.

The 202 pages report indicted several government agencies including the Nigerian National Petroleum Corporation (NNPC) and the Petroleum Products Pricing Regulatory Agency  (PPPRA). It also exposed the Office of the Accountant General of the Federation as being involved in the swindling of the commonwealth of Nigerians to the tune of over a trillion Naira. The report called for the unbundling of the NNPC and te prosecution of its top officials and board members.

Some of the findings and recommendations of the report include:

  • An audit of the NNPC in order to determine its solvency due to the amount of creditors wit claim against it (creditors including Nigerian Customs – N 46 billion and Trafigura – N 542 billion);
  • It recommended EFCC’s investigation of 15 Oil companies that collected over $ 400 million in 2010 and 2011 without importing petroleum products (The oil companies include Business Ventures Nig Ltd ($22,927,339.96), East Horizon Gas Co. Ltd ($20,735,910.81), Emadeb Energy ($6,606,094.30), Poat Nig. Ltd ($3,147,956.19), Synopsis Enterprises ($51,449,977.47), Zenon Petroleum & Gas Ltd ($232,975,385.13), Carnival Energy Oil Ltd ($51,089.57), Crownlines ($4,756,274.94), Ice Energy Petroleum Trading Ltd ($2,131,166.32), Index Petroleum Africa ($6,438,849.64), Ronad Oil & Gas W/A ($4,813,272.00),Serene Greenfield Ltd ($4,813,360.75), Supreme & Mitchelles ($16,947.000.00), Tridax Energy Ltd ($15,900,000.00) and Zamson Global Resources ($8,916,750.00);
  • The report asked that NNPC be made to refund N 310.4 billion it paid itself illegally as subsidy for Kerosene after the President ordered the cessation of such payments;
  • The report highlighted how the Accountant General of the Federation (AGF) paid N 999 million 128 times within 24 hours and asked that the payments should be investigated;
  • It recommended that the PPPRA refund N 312 billion which the agency paid to itself as a discount;
  • It recommended 72 companies including one belonging to the Minister of Aviation to refund N230.18 billion, and called on EFCC to assist in their investigation;
  • It recommended 18 companies that failed to appear before it, refund N 41.9 billion (The companies include Mut-Hass Petroleum (N1,102,084,041.30); Nepal Oil and Gas Service (N2,353,911,979.10); Oilbath Nigeria (N1,019,644,138.97); Techno Oil (N1,036,514, 387.08); Somerset Energy Services (N3,015,221,487.94); Stonebridge Oil (N1,784,158,258.14); Mobil Oil Nigeria (N14, 934, 371,661.76); AX Energy (N1,471,969,643.31) CAH Resources Association (N1,052,466,415.28); Crust Energy (N1,192,651,581.76); Fresh Synergy (N1, 417,029,059.70); Ibafon Oil (N4,687,730,540.46); Lottoj Oil and Gas (N1,427,429,910.95); Oakfield Synergy Network (N988,920,219.15); Petrotrade Energy (N1,471,027,874.73);
    Prudent Energy and Service (N1,360, 898,638.10); and Rocky Energy (N1,620,110,167.58    )    )
  • The committee recommended that a daily importation quota of 33 million liters per day be implemented for petrol and 9 million for kerosene

The House will have a televised debate on the report next week Tuesday.