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FUEL SUBSIDY: NNPC MAINTAINS SECRET ACCOUNTS -RMAFC

By NBF News
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As the debate over the planned removal of fuel subsidy continues, the House of Representatives has raised a probe panel over alleged theft of 150,000 and 200,000 barrels of crude oil daily.

The House yesterday mandated its Committees on Petroleum Resources (upstream) and the Navy to investigate activities of illegal bunkerers even as its two-day round-table on fuel subsidy begins tomorrow.

The development came even as the House was told that the Nigeria National Petroleum Corporation (NNPC), illegally deducted N553, 950billion from oil proceeds between January and September, this year.

Testifying before the Joint committee on Finance, Petroleum Upstream, Downstream and Gas Resources of the House probing the non-remittance of N450 billion into the Federation Account by the NNPC, Chairman of Revenue Mobilization Allocation and Fiscal Commission (RMAFC), Elias Mbam, accused the NNPC of running secret accounts.

But Group Managing Director of NNPC, Austin Oniwon, said that the corporation had through an agreed plan, been paying back the N450billion from the corporation's proceeds.

'Indeed, we are under great duress to pay, I can tell the committee that we have started paying. We were forced to pay, we are paying under duress, when the situation improves, we will revisit the forced payment.'

Apart from the NNPC, Mbam revealed that the Petroleum Products Pricing and Regulatory Agency [PPPRA] was equally guilty of illegal deductions in the same period to the tune of N544.907 billion as subsidy.

These deductions, he stated, contravened the 2011 Budget, which allows NNPC to deduct only N81.72billion and PPPRA should have paid N102.753billion as subsidy to marketers.

RMAFC also disclosed that signature bonus from concession granted on oil blocks to develop the oil and gas sector that should be paid into the Federation Account was being held by the NNPC.

Members were also shocked to know that dividends from the Nigerian Liquefied Natural Gas [NLNG] have not been paid into the Federation Account by NNPC since 2004.

The RMAFC boss lamented that the operation of the NNPC accounts are not open to stakeholders, resulting in lack of information and accountability.

'The operation of NNPC's domestic crude oil and gas account does not promote transparency and accountability.

'Indeed, NNPC pays revenue from its domestic crude oil and gas into its operation accounts and subsequently directs Central Bank of Nigeria to transfer specific amounts to the Federation Account.

'At present, the J.P Morgan Account, where the payment for exported crude oil and gas is paid are not largely being supervised and constitutionally monitored by the major stakeholders of the Federation Account, particularly, RMAFC.

'This situation makes the operation of the account to be shrouded in secrecy and therefore, subject of several criticisms, suspicion and lack of confidence by all stakeholders.

The commission told the lawmakers that it was wrong to pay proceeds from the export of crude oil and gas lifted directly to J.P Morgan account, instead of the Federation Account.

Mbam told the panel that NNPC had paid N15,234,862,500 in two instalments back into the Federation Account from the outstanding N459,776,350,456.99.

NNPC is expected to defend the allegations tomorrow (Thursday).

On the probe for oil theft, the committees are also to identify owners of illegal vessels operating in the territorial waters, the status of impounded bunkering vessels and barges, international clients of illegal crude oil and the alleged failure of the Nigerian Navy to stop the activities of the bunkerers.

Hon. Daniel Reyenieju (PDP, Delta State), who brought the activities of oil thieves on the floor in a motion, lamented that bunkerers were causing harm to government installations and loss of revenue through their constant vandalisation and theft of hundreds of thousands of barrels of crude oil.

The Chairman of the Committee on Inter-Parliamentary stated that the method of operations of the oil bunkerers leave damages that cause environmental degradation and affect the aquatic eco-system of the areas.

While lamenting that many international oil companies have been forced to shut down because of the losses they incurred due to the vandalisation of their facilities, he said there was need to stop the menace.

'There is a an unprecedented upsurge of illegal bunkering activities within the Nigerian coastal region, resulting in the daily threat of vandalisation of oil pipelines and other facilities and general state of insecurity in the country.

'The International Oil Company exploration and exploitation activities at Imo Rivers field, straddles Abia and Rivers states is being forced to shut down its activities because of the apprehension and encroachment of bunkerers into their oil facilities which has five flow stations, a gas compressor station and several kilometres of pipeline'.

The suggestion that an ad-hoc committee would do the assignment better than the two standing committees by Hon Umar Bature, was turned down.

The investigative committee is expected to conclude investigations and submit recommendations to the House within eight weeks.

Meanwhile, the House will from tomorrow convene a two-day stakeholders' roundtable on fuel subsidy. The event which would hold at the Conference Room 023, House of Representatives, National Assembly Complex Abuja, promises to assemble stakeholders in the petroleum industry.

The gathering will also offer Corporate Nigeria, government officials, civil society groups, the academia, politicians and even faith-based organizations, the opportunity to contribute to the ongoing debate on the removal of fuel subsidy.

According to Hon. Dakuku Adol Peterside, Chairman, House Committee on Petroleum, (Downstream), the primary objective of the roundtable is to provide an independent platform for all shades of opinion to canvass their positions.

'As a people's legislature that derives its legitimacy from the people's mandate, we cannot afford to be indifferent as this debate rages.  We have a responsibility to stand up for the people but only after all the issues are placed in proper perspective', he said.

This forum will x-ray the truth, myth and the reality of deregulation, explore the politics and sociology with a view to finding a lasting and agreeable position on both sides of the divide.

On his part, President, National Association of Seadogs International Mr. Oscar Egwuonwu, has said that the only way the proposed removal of oil subsidy would work is if there would be strong assurance that the funds saved would be invested in tangible projects.

The Pirates Capone and leader of the Seadogs Worldwide, who was in Enugu branch to dialogue with his members and discuss national issues, also condemned the controversy generated by the N18, 000 minimum wage, insisting that the governors have the funds to implement the law.

Said he; 'The issue of subsidy is a complex one; my personal view is that there is nothing wrong in taking away the subsidy provided that certain things are in place. If the subsidy is taken away, the funds saved should be invested in tangible things people can see.

'For instance, they are talking of N1.3 trillion, that is a massive amount of money; if that amount is saved, we want to see it in good roads, in improving our healthcare system, improving our education system, improving the security situation in the country.

'People have to see the impact elsewhere; at the same time government can have a way of retaining some form of subsidy for the public transportation system. The existing NNPC stations in all the state capitals can be the key point where major transporters can buy their subsidized fuel.'

'So, I believe that the removal of subsidy will not be 100%; there must be some sort of subsidy to support the public transport system used by the masses so that the cost of transportation will be affordable for the people. The impact on them will not be as severe; but for everybody else it will be a case of if you don't want to pay, then park your car and go use the public transport which uses subsidized fuel.

Meanwhile, a social critic from Kebbi State, Comrade Ahmed Bunza, has faulted the government's decision to remove petroleum subsidy come January next year, saying the decision is akin to anti-people's well-being.

Bunza, a product of the Ahmadu Bello University (ABU), Zaria told Daily Sun in his office that Nigeria is the sixth oil producing nation and the revenue has no correspondent effect on her citizens.

He noted that the current pump price of petrol at N65.00 was just an average of 50 cent of the American dollar, noting that the same 50 cent of litre of petrol is just about 23 cent in Saudi Arabia, about 20 cent in Kuwait, 27 cent in Libya, in Venezuela it is about 45 cent. He said that there is nowhere in the world where petrol is sold for about 50 cent.