SUBSIDY REPORT: As Reps begin debate today

By Charles Kumolu

TODAY’s commencement of debate on the report  of the House of Representatives Ad-Hoc Committee on the utilization of petroleum subsidies, appears to be the beginning of the final battle between the lawmakers and the indicted stakeholders in the oil industry. As the exercise begins, the major question remains: would the exercise be a repetition of past fruitless efforts by the House?

IF some  oil  marketers had their  way, they would rather wish  today never existed, given that the consideration of the report of the  House of Representatives Ad-hoc Committee on the Management of Fuel Subsidy Fund, would commence today. It is not out of place to say that it promises to be the mother of all battles between the lawmakers and  indicted marketers.

With the shocking  revelations that emanated from the report and the  intrigues that preceded  its eventual release last week, saying that those involved in the subsidy regime would be unsettled as the House commences this phase of investigation of subsidy funds is as good as saying the obvious.

This is premised on the controversies already trailing the report, which declared that subsidy regime was fraught with corruption and inefficiency. The report, which was released last Wednesday, had revealed seamy details of fuel subsidy abuse running into trillions of naira.

“The committee believes that if the Petroleum Subsidy Fund was properly managed, N1.07 trillion would have been available to the three tiers of government,” the report stated.

It consequently,  indicted more than 75 companies including the Petroleum Products Pricing  Regulatory Agency  (PPPRA) and the Nigeria National Petroleum Corporation (NNPC).

In addition, the report recommended that the NNPC, PPPRA and a number of marketers  should refund N1.067trn to the coffers of the Federal Government for illegally drawing subsidy funds without importing fuel. The panel also recommended the prosecution of errant officials found wanting for violations that cost the nation trillions of naira.

House Speaker, Aminu Tambuwal, while receiving the report, fixed today for deliberations on the findings and recommendations made by the committee.

Break down: Further breakdown of the report  showed that , the NNPC will be made to refund to the federal purse N705 billion; PPPRA N312 billion; oil marketers N8.7 billion. Firms that refused to appear during the investigations are also to repay N41.9 billion. This brings total refunds to N1,067,040,456,171.31 trillion.

It also said 15  companies obtained foreign exchange but failed to import petroleum products. Another 18 firms, including international oil giants, Mobil Oil refused to be investigated.

The report recommended the unbundling of the NNPC to make its operations more efficient and transparent. According to the report, this can be achieved through the passage of a well drafted and comprehensive Petroleum Industry Bill (PIB). It directed the auditing of the NNPC to determine its solvency.

Also, marketers without storage facilities and retail outlets should be excluded from participating in the subsidy scheme. “This will end the bazaar that constituted a serious drain on the nation’s economy and created room for abuses” the report reads.

The services of the accounting firms of Akintola Williams, Delliotte and Olusola Adekanola and Partners contracted by the petroleum ministry were recommended to be discontinued with immediate effect for professional incompetence.

Unfolding controversies
Despite this apparent guilty verdict, mixed reactions have continued to trail the findings, especially from oil marketers, who were indicted. As gathered, the controversy revolves round allegations  that the report was one-sided and  had a pre-determined agenda among other claims.

For instance, a group, Legislative Integrity said that it noticed a number of inconsistencies having followed coordinated leaks of the committee’s report in recent weeks. The group, which claimed to  have seen the original recommendations of the committee, lamented that what was submitted to the House on Wednesday was an “edited, doctored report.” This was also followed by sponsored  advertisements in some national dailies, by marketers denying complicity in the fuel import and subsidy scam.

Against the backdrop of these claims and counter claims , some marketers have concluded plans to proceed to the court.
The companies that have gone to court based on the House report asking them to refund various amounts of subsidy payments include Mobil Oil Nigeria (N14.934b); Somerset Energy Services (N3.015b); AX Energy Limited (N1.471b);  CAH Resources Association Limited(N1.052b);  Crust Energy Limited(N1.192b); Fresh Synergy Oil Limited(N1.417b).

House of Reps Speaker, Tambuwal

Others are Ibafon Oil Limited(N4.687b); Techno Oil(N1.036 b);Oil Bath(N1.019bn);Mut_Hass Petroleum Limited (N1.2bn); Stonebridge Oil Limited(N1.784b); Petrotrade(N1.471b); Lucky Energy(N1.7); Rocky Energy(N1.620b); Lottoj Oil(N1.427b);  Oakfield Synergy Network Limited(N988m); Prudent Energy and Services Limited(N1.360b); Nepal Oil and Gas Service(N2.353b).

The companies in their response noted that they were not invited to appear before the committee and wondered how the Lawan Committee came to indict them without first hearing for them.

Decision to go to court
The House, it would be recalled, indicted the companies on claims that they failed to appear  before the committee and directed them to refund a total sum of N41 billion. However, the decision to go to the court,  some beleive, is to forestall the refund of money recommended by the committee.

But analysts have described the  move as an attempt by the marketers, who thrived on subsidy regime,to scuttle the report. Also, it was seen as a continuation of efforts to kill the reports, by those, who allegedly attempted to subdue it before now.

What happens after consideration?
But for the fact that removal of fuel subsidy, had ripple effects on every Nigerian, many would not have been bothered about today’s exercise  at the National Assembly. It is for this reason that analysts  are  surprised by the level of public  interest on the issue since the report surfaced in the public domain. But with the nation’s history of fruitless probe panel reports, observers are worried  that the eventual outcome of the exercise, might not see the light of the day. Those, who hold this view, are quick to point to the report of the  Ndudi Elumelu-led power probe panel.

Past probes
The House, it would be recalled, had in 2008 set up the  Elumelu panel to investigate  the “huge sums” allegedly spent on the power sector by the administration of former President Olusegun Obasanjo between 1999 and 2007 “without commensurate results” and tracked $13.28bn as actual expenditure.

The Power and Steel Committee swung into action after  a House resolution empowering it to on the issue. It opened investigation into the mess with a public hearing in March 2008. That was followed with a  tour of project sites across the country in order to verify the veracity or otherwise of the stupendous claims made by the contractors handling the power projects.

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SUBSIDY REPORT: As Reps begin debate today

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