Diezani Allison-Madueke has served as the Oil Minister of the reconstituted cabinet of the Federal Republic of Nigeria. She was assigned to the post by President Goodluck Jonathan., a photo by Pan-African News Wire File Photos on Flickr.
Why graft persists in fuel importation, by govt officials
Wednesday, 18 January 2012 00:00 From Azimazi Momoh Jimoh, Abuja News
A FRESH vista was yesterday opened at the House of Representatives’ investigation of alleged corruption in the oil industry as the Nigerian Customs Service (NCS) said there were abuses of due process by the Nigerian National Petroleum Corporation (NNPC) in petrol importation.
In the same vein, while the Petroleum Minister, Mrs. Diezani Alison-Madueke, did not pointedly admit that there was a petrol subsidy “cabal,” she said that there were manipulations in the oil sector.
The Deputy Comptroller in charge of Accounts and Tariffs, Julius Ndubuisi Nwaogu, who represented the Comptroller-General of Customs, Abdullahi Dikko, disclosed that Customs had no access to the vessels that bring in Premium Motor Spirit (PMS) also known as petrol to the country.
According to him, these big vessels do not get to the shores but discharge from the high sea where smaller vessels would go to trans-load.
He said the Customs could not determine the quantity of refined products imported.
The problem of Customs was further compounded by the fact that PMS is imported into the country duty free because of a 2002 waiver by the Federal Government.
Nwaogu also revealed that the NNPC was owing Customs N46 billion being the debt from duty prior to the debtwaiver.
He said the NNPC had always said that the vessels could not come to Nigerian ports because they could not accommodate them.
Nwaogu also disclosed that whenever the Customs sought to enforce due process in the importation of petrol, it was always told to ignore it in order not to delay free flow of petrol into the country.
He said the Ministry of Finance had even written to direct Customs to ignore all due processes regarding the importation of products particularly the products imported by the NNPC. .
The Customs officer said that Customs was only allowed to have access to products being imported by independent marketers, adding that this was even not all the time.
He alleged that NNPC has over the years diverted to berth the “mother ships” carrying imported petroleum products to neighbouring countries (Cotonou-Benin and Lome-Togo) and only presented manifest of the smaller ships carrying the imported PMS to Customs.
“So, NNPC does not give us documents relating to any of its imported products,” he said.
He also told the committee that even though the Nigerian Customs is a member of the Board of the Petroleum Products Pricing Regulatory Agency (PPPRA), it was never allowed to take part in any of the subsidy verification processes.
Alison-Madueke had in response to questions asked by the Farouk Lawan-led ad-hoc committee on the monitoring and investigation of subsidy regime relating to alleged ‘cabal’ in the sector, declared that it was wrong and dangerous to criminalise the subsidy policy.
When asked if there is a ‘cabal’ operating in the subsidy regime at the NNPC, the minister said, “I think I have to say at this time that I’m under oath and it will be most improper to speculate on the existence or not of the purported ‘cabal’. Let me say for the purpose of records that I think that we cannot afford as a country to criminalise either a certain group with one fell swoop or just as we cannot afford to criminalise the policy of subsidy itself.
“Yes, there have been manipulations in the sector; there is no question about it. Yes, we are looking into it very aggressively and we have made certain changes and once we have taken time to look at the situation on ground, we began to institute those aggressive changes, which are already reaping rewards for us.”
Affirming the resolve of the Federal Government to combat corruption in the sector, the minister said: “I will continue to do that as I am sure the entire country can see that a lot of things are happening that we will continue to harp on until we are able to wrought out those who have actually corrupted the system and manipulate the system to their own advantage to the detriment of the entire country and the economy as a whole.” .
Explaining further how the subsidy grew from N245 billion to N1.3 trillion, the minister said: “Let me just say that the N245 billion was put in the budget for the period of two months and because at that time it was calculated that deregulation was going to take off but thereafter it did not happen. It is the Ministry of Finance that authorises the payments that are made for subsidy and not the Ministry of Petroleum Resources.”
On how to ensure efficiency and eliminate corruption in the sector, she advised the government should do a forensic audit of all importation of refined products including all the vessels involved in importation of petroleum products.
Also yesterday, Nigerian Extractive Industries Transparency Initiative (NEITI), told the committee that most of the payments made in respect of petrol subsidy by the NNPC did no comply with the rules of transparency and due process.
Chairman, Board of NEITI, Prof. Assisi Asobie, said that subsidy payments ought to be made from the Central Bank through the Petroleum Fund.
He said that payment could only be effected on the approval of the Accountant-General of the Federation (AGF) with the approval of the PPPRA.
He accused NNPC of deducting from estimated amounts directly from the domestic crude proceeds before remitting the rest to the Federation Account.
The NEITI boss maintained that, “NNPC, like other petroleum product importers, should draw claims for subsidy after verification of its claims by the PPPRA.”
He said that during the audit of the oil and gas sector for 2006 and 2008, NEITI discovered inadequacies that complicated the problem of accurate determination of volume of imported petroleum products into the country.
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