Senate to probe alleged N10tr fraud in oil industry

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The Senate declared at the weekend that it had uncovered some fraudulent practices in the petroleum industry through which the nation lost N10 trillion between 2006 and 2016.

Consequently, the leadership of the upper chamber has instructed the Joint Committee on Petroleum (upstream and downstream) and Gas to investigate the alleged fraud.

For a nation in recession and planning to borrow to finance its expenditure in 2017, there is the need to urgently stop such fraudulent practices that have robbed it of a huge sum said to be enough to finance the country’s budget for two consecutive years.

If the allegation is true and the money or a part of it is recovered, government will have more money to execute its projects and programmes for the development of the country.

The joint committee, which addressed a press conference on the matter yesterday said it had scheduled a three-day investigative hearing which would focus on the activities of the petroleum sector during the administrations of Olusegun Obasanjo, Umaru Musa Yar’Adua, Goodluck Jonathan and Muhammadu Buhari.

The panel alleged that out of the N10trillion fraud, some N5.2 trillion was lost through the Nigerian National Petroleum Corporation (NNPC) alone, which would be summoned to account for the loss.

The committee said that the N5.2 trillion represented the amount the NNPC collected as subsidy from the Federal Government for the importation of petroleum products, particularly Premium Motor Spirit (PMS) otherwise known as petrol or fuel between 2006 and 2016, aside from the 445,000 barrels of crude oil allocated to it on a yearly basis for the nation’s refineries for local consumption.

The Chairman of the Committee on Petroleum (Downstream), Kabiru Marafa, said that available records before the panel glaringly showed that during the period under investigation, NNPC imported fuel into the country that was more than 40% of our local consumption, apart from gross under-utilisation of the 445, 000 barrels it collected for local refining for local consumption on a yearly basis due to very low capacities of the four refineries in the country then.

“The NNPC, being the custodian of the crude oil resources of the nation, is responsible for 51% of petroleum products importation into the country over the years, aside from the 445,000 crude allocation it gives itself on a yearly basis for the sale of local refining.

“It must account for the N5.2 trillion which available records show that it has spent on subsidy on its own 51% of petroleum products importation between 2006 and 2016 aside from the N3.8 trillion spent on a similar subsidy for independent marketers and about $1.5 billion yet to be accounted for by other key players in the industry,” he said.

Marafa disclosed further that the committee also discovered another dimension of fraud in the industry through the disappearance of PMS from storages leased by NNPC without any accountability and or return of the value of the stolen product. According to him,100 million litres of PMS worth N14billion were stolen by two different companies without any sanction against them yet from the NNPC.

“This committee has established the missing of 100million litres of PMS from such storage arrangement. We expected NNPC to have taken action against the two companies that carried out the theft but since it has not, we hereby ordered it to do so immediately, precisely within this week, failure of which we shall make the whole details known to the public,” the lawmaker threatened.

According to him, all key players in the sector, along with their collaborators who have taken the country for a ride during the period under review, must be brought to book through the investigation to be conducted soon because President Muhammadu Buhari and the Senate leadership are very much interested in unmasking those behind the scam perpetrated during the Obasanjo, Yar’Adua, Jonathan and by extension, the Buhari administrations.

“President Buhari is highly supportive of this move by the Senate and we shall not fail in carrying out the needed holistic investigation into obvious sharp practices in the sector. Needed documents for the onerous task are already in our possession,” Marafa added.

Already listed to appear before the committee during the planned public investigative hearing that will last for about three days are past and present chief executives of NNPC, their counterpart in the independent marketers association, licence inspection agency, Nigeria Ports Authority (NPA), Federal Inland Revenue Service (FIRS) and Nigeria Customs Service (NCS), among others.

The committee said specific areas of investigation would include commercial activities of the corporation, purchases, supplies, distribution and payments from 2006 till date.

The joint committee also said it would probe the N3.8trillion collected by independent product marketers and $1.5billiion being owed the independent marketers by government.

“We have already established the missing of 100million litres of PMS amounting to about N14.5billion. This was done by two companies,” Marafa, stressed.

“We expect full cooperation by all stakeholders and all past and present industry players over the period in question. In the absence of cooperation or where our investigations show infractions, abuse of contract, abuse of position, or collusion that serves to cheat Nigeria, we will recommend the harshest of penalties which will include but not limited to blacklisting of companies and or individuals from ever doing business with Nigeria and or NNPC,” the lawmakers added.

Marafa said that the hearing would not be targeted at any administration.

On his part, chairman, Senate Committee on Petroleum (Upstream) Tayo Alasoadura, noted: “People will come and account for the reason we were importing fuel into this country that was more than 40 per cent of our needs. As soon as fuel was half-deregulated, our consumption in this country came down by about 40 per cent. Who were the people benefiting from this?

“We have a blank cheque to probe into all these matters and we are going to do it and ensure that people who have taken this country for a ride are brought to book.”

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